For many years I had some issues with debts, I shan’t go into the details but it is fair to say that I never correctly managed my debt, and a series of events lead me to be unable to pay my way out. After a chance meeting with an old-school friend Greg Volitich, I opened up to him about my issues, and he helped me to put a plan together to get out of debt, which I succeeded in doing 2 years later. I wanted to share with you how you can get out of debt, if you have found yourself with difficulties.

Facing Up 

The biggest key to getting yourself out of your debt is to face up to the problem. Many people try to hide the fact, ignore letters and phone calls from creditors, perhaps expecting the rebels to disappear, it won’t. Set a day aside, and look to every debt which you have, write down who you owe money to and how much, and then you can start to make a plan.

Budget

Next up you need to look at realistically what you can afford to pay off your debts each month. The best way to create your budget is a simple ins and outs column on a piece of paper. Write down how much you earn, how much you need to spend on bills such as gas, water, rent or your mortgage. Once you have deducted these, realistically calculate what you pay each month for transport or gas, and for food. The figure that you arrive at after these deductions is how much you can afford to pay off your debts.

Making Phone Calls

The uncomfortable part of the plan is to contact your creditors, let them know what your situation is, how much you can afford to pay, and make an arrangement with them for a lower repayment. Creditors do not want unpaid debts any more than you do, so it is in their best interests to help you to reach an agreement. The key is to be completely transparent and honest about your situation, and make an agreement which you know that you will be able to keep to.

Patience and Frugality

Depending on how much you owe, the debt could take some time to come down, so you will need to have a great deal of patience. During the two years that I was paying my way out of debt, I drastically reduced my spending, took no vacations, bought very little, and basically spent every penny that I had on the debts which I had racked up. Whilst this is very difficult to go through, the best advice I can give you is that  the moment when you pay your last piece of debt, you will realize just how worthwhile it was.

Don’t ignore debt, face up to it, make a plan and take action, as soon as it is paid off you will get you life back.