Being in debt is a terrible feeling that most Americans have gone through at one point, or are currently experiencing. Consumer debt can cause enormous stress and can prevent you from achieving certain goals such as retiring or purchasing your first home. Unfortunately, most people in debt are not able to get out of debt as fast as they would like. Here are a few tips to help you get rid of your consumer debts as fast as possible.
Avoid Adding More Debt
Often, people in extreme debt are in situations where they are living paycheck to paycheck. As a result, it can be tempting to rely on credit cards for small expenses here and there. However, this should be avoided unless absolutely necessary. Using credit cards while attempting to get rid of debt is counterintuitive.
Decide Which Debts to Pay Off First
Prioritizing your debts is a great way to stay motivated and to get rid of debts one by one. Generally, the best course of action is to make paying off your high-interest debts your number one priority as it will save you the most money in the long run. However, paying off these debts can seem intimidating, so it might be better to pay off your smaller debts first in order to stay motivated. In addition to choosing which debts to pay off first, you need to determine how much you can afford to pay every month. If you are able to pay more than the minimum amount required, then you absolutely should.
Consider Debt Settlement
If your consumer debt is out of control, and you are not able to pay it back even after negotiating with your lender to make smaller payments, then you should consider settling your debt. An experienced consumer debt attorney can help you negotiate a lump sum amount of money that you can pay to your lender in order to eliminate your debts. While this can have a negative impact on your credit, it is a great option for those who might otherwise have to declare bankruptcy.