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Get Out Of Debt The Professional Way

By Michael Redbourn

Republish: EasyPublish™
Published: 08Jul2009
Word count: 637
Viewed: 371 time(s)

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It might surprise you to know, that according to surveys, that more than 63% of people that are trying to get out of debt are doing so without any kind of plan.

They haven't really thought about how much they need to repay each month, or even set a target date for being debt free.

Since you're reading this, the chances are that you have an interest in getting out debt, so here's how to do it.

The very first thing to do is to lower your interest charges, and you can mostly likely do that by simply calling all your creditors and asking them to lower the rates.

Believe it not, but it will probably be that simple, because studies show that more than 50% of people that call and ask credit card companies, and other lenders to lower their rates, get them lowered by up to a third.

Look around and see if there are things that you never use that you can sell, and after you've sold them, use the money to pay down some of your debts.

If your paperwork's not organized, then here's how to do it.

Buy some big envelopes, label them and have a separate one for each account, and put all the statements that you can find in them.

If you don't have printed statements, then go online and print them out. I know it's hard on the trees, but it's easier to work with paper that's in envelopes, than it is on a monitor.

Either set up a spreadsheet if you know how to, or use pen and paper to list your balances, APR, payment dates and minimum payments.

Then create a summary sheet which shows your total credit card debt, and total credit card spending.

If you've done all that, you should now know your total debt, your total monthly required payment, what you currently pay on your debt, and how much you charge each month on your cards.

The most effective debt payment plans start with a constant total monthly amount, and this is how you figure out how much you should pay.

Add up all the minimum amounts that you have to pay, and that is your starting figure. Now check your last two months of expenses and see if you can reduce them somehow, and if you can, then add the amount that you think that you can save to the starting figure.

Be conservative when deciding what you can pay, because it's better to raise the amount after a couple of months, than to lower it.

We'll now look at three different payment systems, and you should choose the one that you think will work best for you.

The most efficient technique is to make the same payments on all your accounts with the exception of the one that has the highest interest rate. The "same payments" means that even when the card company asks for less every month, that you keep paying them the same amount.

The card with the highest interest is the one that you should focus your attention on, and any extra money that you have, should be paid into that account.

The second system is similar to the above one, but instead of focusing on the account that charges the highest interest, you focus on the one with the lowest balance in order to get it paid off quickly.

The third system is the least complicated, and you simply pay the same amount on every card every month, and as one account gets paid off, you use the extra cash to raise the monthly amount that you're paying on all the accounts.

All three systems work as long as you stick with them, so just start using one of them as soon as possible, and start getting out of debt.

The author of this article was a film producer, and award winning film sound editor for many years. He has a passion and a flare for economics, and one of his websites -> Pay Off Debts features the famous Get Free In Three system which has helped a huge number of people get out from under suffocating debts.

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