Fighting Your Way Out of Debt

Posted by stephfoster

April 7, 2008

When credit card bills get out of hand, it can be very tempting to declare bankruptcy and just start fresh. It sounds so much better to be free of debt. However, bankruptcy is generally not that good an option. Paying off your debts in many cases will be a better choice.

That’s not to say bankruptcy is never the right choice. Some life events do leave you in a position where paying it all off is quite simply impossible. But that shouldn’t happen if the debts are due to what more or less amounts to deliberate overspending. Bankruptcy is more reasonable in cases involving high medical bills and other crises where there was no way to avoid high debt.

When the time comes to fight your way out of debt, you must be determined. You have to tell yourself that you will get your finances under control. You will pay those debts down. You will learn to control your spending.

And that’s the key. If you don’t change your spending habits, getting out of debt can be next to impossible. Even bankruptcy won’t be a permanent solution if you don’t learn good spending habits.

Take a solid, honest look at your finances. Include not only the spending you must do every month, but your current debts. You want to work out a budget that will let you pay off your debts as quickly as possible.

Paying down your debts quickly is key. The longer you have debt, the more you pay in interest.

Call your credit card companies and just ask about getting a lower interest rate. If you have a lower rate offer from another company, don’t be afraid to mention it as an alternative. Ideally, your current account will get a lower interest rate.

Think carefully about cancelling any current credit accounts. Yes, it removes the temptation to use them, but it can have a negative impact on your credit rating. Instead, try making it hard to use those accounts. Drop the cards in water and freeze them or cut them up. Just do something so that you cannot use them easily.

Sometimes you may need to flat out earn more money to take control of your debts. Don’t be afraid to take on an extra job if that’s what it takes. There are many ways to earn more money when you absolutely have to, and you just have to find the ways that suit your lifestyle.

Above all else, learn to control your spending habits better. Try to live below your means rather than above them. Debt can make your life miserable. You’ll be much happier if you have control of your life with little or no unnecessary debt.

Stephanie Foster blogs at http://credit-blog.findcreditonline.com/ about credit related issues. If you need debt consolidation help, she has resources for you at http://www.findcreditonline.com/debt-consolidation.php

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