Stop Dragging Your Feet: Get Out of Debt Now

With the number of Americans losing their jobs growing at a staggering rate, it's no wonder that some people who are deep in debt are running away from it instead of meeting it head on. Even when your debt is overwhelming, letting it get out of control is only going to make the problem bigger and more difficult down the line because debt will never just “go away” no matter how much you might wish it to!

It's time to stop dragging your feet and take action to get out of debt now. Here's what you can do:

Call Your Creditors:  instead of avoiding the inevitable phone calls when you have trouble making your payments, get on the phone and give them a call.  Tell them you know you owe them, and you are doing the best you can to pay your debts.  Ask if there is anything they can do to make your payment more manageable – maybe lower your interest rate on credit cards, or in the case of loans – allow you to skip a payment without fees and penalties in order to get back on track. 

Reduce Your Expenses:  you will need to cut out everything that is not absolutely essential to living right now, in order to put as much money as possible toward paying back your debts.  The sooner you get out of debt, the more money you can use for the things you want to use it for (including avoiding getting into additional debt – since you'll have more cash on hand to make the purchases you might have otherwise charged to a credit card).  The first to go should be cable television packages, eating at restaurants and ordering take out, gym memberships and other monthly memberships that are not absolutely essential.  You can start adding these things back into your budget as you pay down debts and free up more of your money.

Consider Getting Help:  There are debt settlement companies and debt consolidation companies who may be able to help you get on track.  Sometimes they help you lower rates and fees on your credit accounts, and can restructure your payments to make it possible to keep up.  Just be sure to do your homework to find reputable companies, and take care to compare their help versus what you can do on your own to make sure they really are saving you money in the process. ( editor's note: see our article on How to Avoid Debt Reduction Scams )

Pay More than The Minimum:  whenever it is possible, you need to send more than the minimum payment to a creditor – especially credit cards!  Their interest rates, late fees and penalties add up so quickly that you could literally send them a minimum payment on time each month and still manage to owe more the following month than you did the last!  Pay more than the minimum required whenever possible, focusing on your highest interest debt first.
 

Consider Borrowing from a Friend or Family Member:  if your situation is really desperate and you have someone who can help you – you might consider borrowing money from a friend or family member to pay off some of your debt.  Just be sure that you work out the terms of the agreement and how the money will be paid back upfront so there are no problems down the line.  Keep to your agreement and make your payments on time to maintain the integrity of your relationship.

Whatever you do, don't just hide under a rock and expect your debt to disappear.  You need to take action to pay off debts.