Get out of debt

 Step #1:  Renegotiate debt, consolidate debt, and settle debt

The first thing you need to do is get your existing debt as low as possible. One way to do this is to get your debt lowered, but not actually have to pay it all off. This is called renegotiating your debt. Renegotiating your debt can lower your debt immediately and allow you to pay off your debt faster. The reason this works is because companies are concerned that they will never get you pay off your debt, so they will be happy to negotiate your debt in order to get something rather than nothing. By negotiating with the companies you owe, they may extend you better terms or even to take a reduced amount just to be sure they get some pay back of your debt. By calling the loan company or credit card company directly or getting a professional to negotiate for you, you can often get them to take a percentage of the original loan as final payment. Don't be afraid to explain your money and credit situation. If you can strike a good renegotiating deal, one successful debt negotiation can be a huge first step in eliminating your debt. There are many companies out there who specialize in debt negotiation. Be careful when choosing one of these so you don't get scammed. A financial advisor can go a long way in helping you choose the right company to work with.

You can also consolidate your debt. This is where you basically take out a lower interest loan that consolidates all your debt into one loan. By using the money from a consolidated loan to pay off all your higher interest loans like credit cards, you can save on monthly interest. The real danger here is that you will then have paid off credit cards. If you do consolidate your debt, it might be a good idea to cut up your credit cards. Maybe keep one for emergency use. Your credit cards will be a temptation and you could end up further in debt than you were before the loan consolidation.

One thought is to first renegotiate your debt. Try to get your debtor to agree to a lower payout and a lower interest rate. If this doesn't work, then look into consolidation of debt. But again, please beware, the consolidation loan can be a big temptation.

Some people don't need to take this first step in getting out of debt and can move straight to step number 2 and paying off their credit card debt. However, its always a good idea to take a step back and look at your overall debt picture. Does debt consolidation or debt negotiation make sense for you.

Now that you've started to manage your debt, its time to move on to step 2. Please Note: you should always consult your professional financial advisor or planner. The advice on this page is just opinion and we recommend you consult a professional before making any financial decisions. .

Go to Step #2:  Pay off your credit card


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6 Steps to no Debt 

Step #1:  Renegotiate debt, consolidate debt, and settle debt

2) Pay off your credit card

3) Get some emergency savings

4) Start investing in 401k plan or IRA

5) Pay off other debt

6) Invest conservatively

Controlling Expenses 

1) Utilities

2) Food

3) Clothing

4) Entertainment

5) Gas

6) Other "Stuff"

Financial Mistakes to Avoid

Holding Loser Investments and Stocks

Not saving for Retirement

Interest Free

Interest Only Home Mortgages

Cash Value Life Insurance

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