How Best to Deal with My Debt?

Here's what I did to help me get out of debt. It's a cut and paste of a previous post so forgive me it it sounds a bit off.

The best thing you can do for yourself at this point is to utilize what money you have to the BEST of its ability. This means you need a strict budget and stick with it. Figure out what money you have coming in for the month and try to come up with an exact dollar amount as possible. When you are low on funds every penny counts.

Next, you are going to pay NECESSITIES ONLY. The reason I wrote that in caps is because everyone has different ideas on what a necessity is. This caused many heated arguments in my marriage!

A necessity is something you need in order to live. Food, shelter, utilities, and transportation. Examine these necessities and see what can be trimmed from them. For example, food. (Food meaning GROCERY BILLS (eating out is not under food but under entertainment because it is a luxury). Some people say your grocery bill should be $100 per person per month???.but I find that figure insanely low. It can be done will careful planning and coupons but I???ve never ever been able to get anywhere near that figure. Utilities???see what can be cut. Cut your cable bill by getting rid of premium channels. Or get rid of cable all together. If you have a cell pone get rid of your landline. Make sure your cell phone plan fits your usage- don???t pay extra for a lot of minutes you never use. If your car payments are killer, consider selling the car.

After necessities are paid, take what???s left and distribute it among minimum payments to your credit cards and loan accounts that you???ve been paying.

Once minimum payments are met see what else you need to factor into your budget and look for missing categories.

Now that your budget is done see what figure you have left. This is your DEBT FREE money. You'll use this full amount to pay off your debts.

List all of your revolving credit accounts (do not include mortgage or car payments yet) in 1 of 2 ways: From least amount owed to largest amount owed, OR from highest interest to lowest interest. You'll need to do the math both ways to se which way works best for you.

Personally, I have been working mine from smallest amount due to largest amount due. As I pay off the balances it motivates me to work harder!

Take all of your DEBT FREE Money mentioned above and pay the entire amount towards your smallest debt (or highest interest debt). Do that every month until your account is paid in full. Once paid in full, DO NOT close the account. DO NOT charge on the account again! Take every dollar you were using to pay the account and apply it to the next account. Now that you paid off one account make sure you take the minimum that you were paying on acct #1 and apply it to acct #2 as well.

Now that you???ve made a budget and trimmed the extras and are paying down your debts your next goal is to bring more money it. Get a job at Mc Donalds or the local Pizzeria while you seek other employment. Head to the mall to see who is hiring. Get an early morning paper route.

Have yard sales. Sell on Ebay and Craigs List. Check Craigs List daily for items people are giving away for free and go grab them, then sell at your own yard sale. Return soda cans. Pick up every penny laying around the house and get a change jar going. Look for someone who needs a ???handy man???. Elderly people may be looking for someone to do their grocery shopping. People like to pay others to mow their lawn. Things like that.

Any money that you bring in will go into paying the current account you are paying off. Keep repeating the steps until all of your cards are paid off.

And the most IMPORTANT step....STOP CHARGING! Easier said then done, I know! LOL But it has to stop if you ever want to come out on top. It???s a long process, but it works. It???s what I???ve been doing. Take it one day at a time???it get???s better!

Good Luck!

that is some great advice some of which im working on myself. I myself have achieved less than 300 a month on groceries for a family of 3, by purchasing generics. shopping at aldis or discount stores dollar general, sams, save alot, etc. coupons and buying what is on sale. another helpful thing is say whole turkeys are on sale i will buy one cook it on saturday with pototoes and store the rest for later. cook real meals not pre maid those are very costly in the end. a 15 lb turkey and a bag of potatoes will make our family many many meals for less than 16 0r 17 dollars.

we also went from plan cells to track phones emergencies only! or can you pick up some milk? calls. 20.00 buys 60 minutes witch lasts us about 3 months. my last phone broke and i purchased a new one for 20.00 with lifetime double minutes. so mine last even longer watch for those deals.

after my debt settlement program i will never go into debt again and i keep us this way buy doing these things. if moneys tight i go for a walk pick up beer cans (i live in the biggest redneck town beer cans are always laying around.)

we also save by making home made cleaning supplies, selling old or uneeded things on ebay. we only make 1 trip to town for necessities and if we forget it were out of luck and have to go without. one of those fridge magnets were you can leave notes is great for a grocery list i love mine.

outside of a consolidation (home equity, personal loan, or debt counseling) and you have ruled out settlement wich is good if you are still managing your payments because it will trash your score. all you have left is to focus on one and work your way up. hope you can see your way through and let us know!

Thanks for the feedback. I'm basically doing most of what you mention already, although the reminders are always good along with a few tips I hadn't considered. I was mainly just curious to hear if there were any "proven" ways in which I could convince my creditors to lower the interest rates or something so that the process could go more quickly. My credit is good, and I'm making payments, I simply would like to be making them on a more reasonable interest rate, especially considering how low rates are at the moment.

i wish i could help you out, but im with ya. the last 3 months i have had 1 card cancel me completely (with a balance so it hurt my credit) an 2 lowered my available credit, and all of them almost doubled my %. i called and complained but of course "due to the times" they have changed thier terms. i think its a way to get the highest % quickly before the reform went through

Besides paying your bills on time all solutions are going to affect your credit. Something you have to ask yourself is do I want to be debt free or continue paying my minimums until I die! The previous post were good. Eliminating one debt at a time and sticking with your neccesities rather then throwing your money away. If you are just paying your minimums you will throw a lot of money away.

With credit you are able to obtain more debt. What is debt a legal obligation to render someone else an agreed upon tender. Credit is repairable being a debt until you die is unacceptable. Are you looking to buy a house or car within the next three years? If not eliminating your debt by any means possible should be your first priority.

Credit Counseling, Debt Settlement, Debt Consolidation and Bankruptcy will all affect your credit negatively. If you have a high debt amount versus what your income is, you are already affecting your credit. Credit is dictacted by five key things.
1) Payment History: 35%
This category includes payment history information about several different types of accounts such as credit cards, retail accounts and installment loans. Many factors are considered including number of past due items on file, amount past due on delinquent accounts or collection items and severity of delinquency (how long past due)

Timeframe Approximate Weight Assigned to Year
Most recent 12 months 40%
Prior 12 to 24 months 30%
Prior 24 to 36 months 20%
Prior 36 to 48 months 10%
Older than 4 years 0%

2) Capacity (Amount You Owe): 30%
The FICO scoring model weighs capacity heavily because it knows that the majority of Americans who go bankrupt charge up their cards to the limits before they file.2 The FICO model considers three separate components of an individual's credit when assigning capacity points:

Installment balances compared to the original loan amounts.
Revolving account balance compared to an individual's revolving credit limit on an account-by-account basis; and
Total revolving account balances compared to an individual's total revolving limits.
It is in your best interests to keep balances low on all revolving credit and pay off debt within open accounts instead of closing accounts and consolidating it into one or two accounts with higher balances.

3) Length of Credit History: 15%
Even if a member no longer wants an older account, he or she should think twice about closing it. Lenders are looking for borrowers with long credit histories. Also, members with new credit should be cautious about opening many accounts. Rapid account buildup may look risky because of uncertainty in handling the credit .

Hard inquiries, or requests from creditors for a copy of a report, are tracked on the credit report for 24 months. But, only the inquiries from the most recent 12 months are included in the FICO score calculation.

4) Types of Credit: 10%
This category looks at the overall mix of credit such as credit cards, mortgages or consumer finance accounts. Members should try to balance the mix but are advised not to open new credit accounts for balancing purposes unless necessary. It is unlikely that adding accounts will improve their credit scores.

5) New Credit: 10%
Approximately 10% of your credit score is based on how many recent new accounts you have established. This factor reviews:

Number of accounts
Length of accounts
Recent requests for credit report
Length of time since credit report inquiries were made by potential lenders

Credit is repairable. Taking food off of your table or passing debt on to other family members creates hardship.