How Do I Get Out Of Debt?

 

As a financial educator and counselor, I come across so many people with the same question. How do I get out of debt?  While that question has specifics geared toward each individual’s personal situation, there are only a few ways to get out of debt in my opinion.

 

One of the most requested seminars from our membership or the community has to be dealing with debt in some form or fashion.  Reduction of debt and increasing your creditworthiness now seem to be the “hot topics” of our time.  Folks have realized that the good times of easy money have dried-up, or at least they have dried-up for those who have put themselves into debt.

 

So how does a person actually get from Point A to Point B?  Folks attend the seminars or not attend the seminars, but they all want that magic bullet to help them “get-rid” of their debts.  It is funny how most people do not even think about what “could happen” until after they are already in bad shape.  Most folks want an easy way out.  Okay, there are those who have fallen upon bad times with unemployment and other unforeseen issues, but this blog is not about those folks.  This is about those folks who want a way out of debt who have created their own situation.  So again, how does a person get from Point A to Point B?

 

I only see five ways out of distressful financial situations and three of them I am against personally.  However, it is not about me but rather about the member or folks we serve in our community.

 

1. Income
2. Expenses
3. Debt Consolidation
4. Debt Settlement Companies
5. Bankruptcy

 

I prefer the first two ways the most, but I realize that those two ways are not for everyone.  If there was not a market for the last three on the list, then they would no longer be in existence. You can income your way out of financial distress.  Simply make more money and throw that at your debts and pay them off.  Next, you can drastically cut consumables and get yourself into a better financial condition.  Thirdly, you can role up most of your debt and make one easy payable amount and free up some spare cash.  This often puts the person into a false sense of security and they get right back into trouble.  A lot of times they make the situation worse.  The fourth option is to “hire” someone to fix your problems for you.  However, these debt settlement companies are not always in it for you.  Finally, claiming bankruptcy is sometimes the last resort for many folks.  We are seeing an up tick in filings due to or current economic condition as a nation.

So are there any other ways out there?  How would you get from Point A to Point B?

 

- Phillip