To Get Out of Debt, Just Get Started
The hardest part about getting out of debt is getting started. Taking the first step to get out of debt is much more difficult than the several hundred steps you took to get into debt. For some, that doesn’t require much more than just buckling down, being honest about what you can afford, knowing how much money you have coming in and prioritizing your spending. If that’s your debt situation, consider yourself lucky. In fact, you probably could have avoided getting into debt in the first place! *Guilty blogger currently writing this post* In many situations similar to my own, you have the ability to get out of debt within a couple of years, if you have the desire to do so. I know I am motivated and have stayed the course for the past 15 months—sometimes I make $12 payments to my credit card just “for fun” and to watch the balances go down as quickly as possible. Once I took the first few steps to getting out of debt and started being honest with myself, the path out of permanent indebtedness became a lot easier to follow.
But sometimes desire, motivation and even a healthy dose of ambition are not enough to get you out of debt. What if you have six-figure debt? What if your debt dwarfs your monthly debt payments, to say nothing of rent, utility bills, food and gas expenses? When you feel like you have no ability to pay off debt and cover your monthly expenses at the same time, that’s probably the ideal moment to start considering options you weren’t aware of. A debt management program could work best for people who are not in a situation where they need to declare bankruptcy, but are overwhelmed by just the minimum payments on their debts and are beginning to fall behind on payments. Not to mention the ease of payment consolidation, and its favorable effect on interest rates.
At my highest amount of debt (a whopping $46,000 in 2010), a debt management plan was still just outside of my realm of options, based on my income. But if I had lost my job or incurred some unexpected expense, that would have pushed me just past my “barely skating by” status, and I would have to consider options a tad more complicated than putting my money in envelopes or paying the smallest debt first. A debt management plan would make one monthly payment towards all of your creditors. That single monthly payment can feel like a sigh of relief if you’ve spent years paying dozens of different accounts with negligible effects on the account balances. If taking the first step to get out of debt seems impossible, consider all of your options, and seek the advice of people who have already been through it.
Have you ever considered or done a debt management or settlement plan? Did you do plenty of research before choosing a plan that works best for you?
This is a sponsored post by The Providers of CareOne Debt Relief Services, an industry leading debt relief company, specializing in counseling individuals in managing their personal finances.
I’ve been lucky that I’ve never had to go through this type of thing before. I was reading recently, though, about a celebrity who successfully negotiated debt down to below half of what the amount had been.
We have an option in our Province that we can do a debt consolidation with one monthly payment and 5% interest and based on a current budget, re-pay the entire amount over 3 to 5 years. Kinda like a short term mortgage, but you do not need to qualify for the loan. You do need to surrender your credit cards for that time as well.
There are similar debt solutions in the UK Tackling Our Debt but I agree with the article; the sooner you start the sooner you’re debt free!
There are some kinds of debt that, while they may not necessarily be good, they are acceptable. For instance, the debt you have on your car that you pay off each month, or the money you owe on your house that is always set aside and paid on time. That is not bad debt.
I don’t know if I agree about the car debt being “acceptable” – the rates on car loans tend to be so high. Now your mortgage, maybe… surprised you didn’t mention student loans!
Next month will be the first month of a debt management program for us…you can read all our financial woes over at the blog but we’re one of those 6-figure suckers
You have to be careful with DMP’s, there are unfortunately people out there taking advantage of other peoples hardships and actually profiting from them, sad. Do your homework for sure!!
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I’ve never considered going this route as I have never had enough debt to make this option viable. But if I did, I might look into it. But lots of homework has to be done on the companies and services and how much they charge you. There are a lot of businesses out there looking to take advantage of people struggling to get out of debt because they know most are easy targets.
I can’t say that I have done a debt management plan but I have been researching them for years. Actually probably for as long as I have been pf blogging. I actually just found a non-profit that does one of the best jobs I have seen yet – no plug here feel free to check out my blog for it. Just wanted to share that it is critical to do your homework because there are a ton of places that are more than happy to take your money and walk away with it. They can be helpful if you feel like things are getting a little out of control but like a few people said the best thing you can do is just start. The longer you wait with something like this the worse that it can get.
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