Advice and Strategies to Get Out of Debt
Advice for managing debt falls primarily into two main buckets:
- Self-managed debt pay-down and optimization; and
- Debt help and advice from debt solution providers.
Well try to get you started down the path on both debt fronts and then point you in the right direction to help you solve all of your debt troubles, no matter where you stand today and what your goals are, with the help of our debt resources that are easy to use and can help you solve your debt concerns, including: Debt Articles — Debt Guides — Debt Calculators — Debt Questions — Budget — Videos on Debt Advice — Debt Relief Boot Camp — and a matching service to get free Debt Quotes.
Self-Managed Debt Pay-down Tips
At the end of the day, paying down debt is about cash flow. You need more income coming in than you have expenses going out and then you must use all of that freely available cash flow to pay down your debts. This sounds simple, but sometimes the most basic advice is the hardest to live by, and starts with the “B” word: Budget! As a part of any good and strong budget you need to know what you can afford, pay your bills on time (use online bill-pay to avoid late fees and help manage payments), do not just pay the minimum but pay as much as you can each month, stop using high-interest rate credit cards and even look to lower your rates by negotiating with your lenders, and in many cases you can use your savings to pay down high interest debt. We would recommend the debt avalanche approach, where you pay as much as you can towards your highest interest rate debts first and then roll all of the free cash available to the next highest interest cost account as each gets paid down.
Debt Advice From Solution Providers
There are several primary forms of debt relief to help someone deal with debt problems. Bills.com has created dedicated content and mini-portals on each of these main debt solutions, including:
We have also created an industry-leading debt white paper that compares debt settlement and credit counseling across a variety of factors such as the actual cost, monthly payments, time to debt freedom and success rates of the main debt relief options.
Quick Debt Advice
Our quick advice goes something like this — if you have a home with over 20% of the value in equity, you should refinance your mortgage and consolidate debts with a new mortgage. If you cannot refinance, but can afford to pay more than 4% a month in monthly payments, then explore rolling up your debts by paying as much as possible to the account with the highest interest rate first and then snowball up your debts until they are paid off. If you cannot afford your monthly payments, then explore debt settlement (where you resolve your debts for less than you owe and get debt free in a short amount of time, but sacrifice your credit rating) or credit counseling (where you pay slightly lower interest rates and lower your monthly payments). Lastly, if you cannot afford to pay even 1.5% of your outstanding balance each month, then seek counsel from a bankruptcy attorney.