- 3 min read
- There are no easy ways to get out of debt if you have serious debt problems.
- Know how much you owe, how much you can pay and keep your expectations realistic.
- Use Bills.com resources including Debt Coach to find the best way to get our of Debt.
Find Your Way to Get Out of Debt
Getting out of debt is a worthy goal, but that is easier said than done. It’s important for you to know that you are not alone. The news is full of stories about underwater borrowers, students with huge debts, and households with massive credit card debt. It’s not very easy to get out of debt. Otherwise, everyone would just say the magic words and- poof!- the debt would be gone.
Five Easy ways to get out of debt?
There are no five easy ways to get out of debt, unless you don’t have a real debt problem, no matter what you read.
You can read about programs that make it sound easy, outlining five (give or take a few) steps to get you out of debt. They give you common sense advice, like:
- Make more money.
- Stop using your credit card.
- Pay off you debt quicker. Make more than your minimum payments.
- Save Money.
- Take low interest cash out refinance mortgage or loan consolidation loan.
These are all great ideas. If you are able to put any into practice, do so. However, most debt problems are not solved so simply. They call for concerted action. The best way to get out of debt varies, from person to person. Some people can solve the problem on their own. Others will need professional debt help. Be patient. Just because there is no easy way, does not mean that help you won’t solve your problem.
Any of the ways to get out of debt and stay debt free require you to establish healthy financial practices, including keeping and maintaining a budget.
Here are a few preliminary steps to prepare you to get out of debt:
- Organize your financial paperwork. Keep separate files for your different credit accounts, income statements, bank accounts, bills, and expenses.
- Prepare your budget. Use the Bills.com budget guide to help you set up your budget.
- Know exactly how much you owe and how much you can afford to pay each monthly towards your debt.
- Keep your expectations realistic. Think about how much stress you can handle. Remember, there are no magical solutions.
Finding the Best Way to Get Out of Debt
The best way to get out of debt is the one that works for you, that is consistent with your goals and ability to pay. Accelerated payments, loan consolidation, cash-out mortgage refinance, debt counseling, debt management, debt settlement, and bankruptcy are all good ways to get out of debt. These are complicated terms and each of them takes diligent effort to complete.
In order to help you find the best way for you to get out of debt, take these three steps:
- Read the Bills.com excellent article about debt relief options.
- Use the Bills.com Debt Coach. Based on your debt, assets, and goals, the Debt Coach will recommend the best way to get out of debt.
- Quick tip: Contact one of Bills.com's pre-screened debt providers for a free, no-hassle debt relief quote.
Did you know?
Mortgages, credit cards, student loans, personal loans, and auto loans are common types of debts. According to the NY Federal Reserve total household debt as of Q4 2022 was $16.91 trillion. Housing debt totaled $12.26 trillion and non-housing debt was $4.65 trillion.
A significant percentage of people in the US are struggling with monthly payments and about 26% of households in the United States have debt in collections. According to data gathered by Urban.org from a sample of credit reports, the median debt in collections is $1,739. Credit card debt is prevalent and 3% have delinquent or derogatory card debt. The median debt in collections is $422.
The amount of debt and debt in collections vary by state. For example, in Connecticut, 22% have any kind of debt in collections and the median debt in collections is $1427. Medical debt is common and 10% have that in collections. The median medical debt in collections is $490.
To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.