Getting Out of Debt

• 1). Check to see which debts you still legally owe. Once a debt has passed the statute of limitations in your state, a debt collector may not legally sue you for the debt to secure a judgment and garnish your wages.
  
  
• 2). Call any creditors to whom you owe debts that are not beyond the statute of limitations for your state. Explain your current situation and attempt to negotiate with your creditors for lower balances and interest rates. This will make the debts easier to pay off.
  
  
• 3). Pay down the debts with the highest interest rates first. These debts should be a priority due to the fact that rapidly accruing interest can cause the debt to become unmanageable within a short period of time.
  
  
• 4). Put any extra money you have toward your debts. Rather than spending your bonus check or overtime on items you do not need, you could be paying down your debt more quickly.
  
  
• 5). File for bankruptcy if you do not have the means to repay your debt. Bankruptcy will damage your credit score and may limit your disposable income if you are assigned a repayment plan, but it will allow you dispose of most types of unmanageable debt.
  
  

Living Debt-Free

• 1). Take a debt management course to learn how to stay debt-free. If no debt management courses are available in your area, you may opt to take one online.
  
  
• 2). Set aside an emergency fund. You can make the same payments to you emergency fund every month that you were paying on your debts and have a comfortable sum of money within a few months. You can use this money to pay for unforeseen emergencies that may otherwise require you to go into debt.
  
  
• 3). Evaluate your monthly expenditures. If you can barely pay your mortgage payment and bills every month, you must either increase your income or reduce your financial liabilities. If getting a higher paying job is not possible, downgrading to a less expensive home, car or cellular plan will allow you to live within your means.
  
  
• 4). Pay all of your bills on time. Paying a bill late can result in late fees that are a waste of money - especially when you consider that the amount of a late fee could have been put toward your emergency savings.
  
  
• 5). Resist the temptation of new credit offers. If you know you have a tendency to use credit unwisely and get into debt, you can avoid new credit offers by visiting optoutprescreen.com and opting out of the credit marketing system.