The first step in dealing with your debts is WANTING to do something about it. Without a desire of doing something, nothing will ever happen! If you have debts, you better start to think how to put a stop on them before they’re taking over your life. If you want to be able to live a debt free life in the future and get on with your life, you will need to get rid of your debts.

Below are some of the steps you need to take first in order to get out of your debts…

• First, you need to make a list of all the debts and loans that you have, or in other words, make a list of all of your creditors, making sure to list every single one so that your calculations don’t go off later on.
• Next, you need to find out how much you owe.
• Then you need to find out how much you can pay each month.
• Then you need to find out which option of repayment is the one for you.

Find out whom do you owe to…

This can be a fairly simple or complicated process depending on how many creditors you have. But always start at one end first. That way, you will find that it is easier to proceed on. So start gathering together the paperwork or things which will tell you exactly how much you have accumulated over the months and years.

Go through this pile, and sort them out into groups which make sense to you. For instance, I went through my pile of debts and notices and sorted them according to two different criteria.

My first requirement was to find and isolate those payments which I had missed out on and which more or less needed to be paid immediately. My next requirement was to sort things out into the order of the highest amount or the highest interest rate.

What I had done basically was to prioritize my debts in a manner which I could relate to. You can do the same, but since your priorities aren’t necessarily going to be the same as mine, you can always change things around to suit you.

For instance, you could prioritize your debts according to…

• Urgency of repayment
• Missed payments
• Highest amounts to be paid
• Highest interest rates
• The type of loan you have, i.e. credit card, personal, house, car etc.
• By creditor, if you have more than one loan with a creditor.

Once you have sorted things out according to your priorities, you can then set about the business of putting things down on paper. This is a crucial step as otherwise you will find that you are forever sorting through the piles and piles of paper that you have.

And you will also want to remember to note down at this time other payments which you might have to make, such as spousal support or child support or other such payments as this is also a type of debt that you have to pay off.

P.S. For more information on how to be debt free fast, check out this ebook “Debt Free in 3“.

get out of personal debt, how to deal with debt, how to deal with personal debt, how to pay personal debt

If you’re new here, you may want to subscribe to my RSS feed. Thanks for visiting!

(No Ratings Yet)

 Loading ...

Share This  |  Email This Post  |  Print This Post  |  Subscribe to It!
This entry was posted on Sunday, November 2nd, 2008 at 9:56 pm and is filed under Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.