6 Steps to Get rid Off Your Debts by Suzanne Williams

If you have incurred multiple debts and those are creating havoc in your life, you can look out for some options to become debt free.



How to become debt free



You can become debt free if you follow the 6 steps mentioned below:



1. Make a list of your debts: You should prepare a list to find out how much money you really owe. You should include all the debt amounts, even it is for only $100. Then, find a total amount of your debts.



2. Prioritize your creditors: You should make a list of your creditors on the basis of priority of debts owed to them. You should place the creditor with highest interest rate at the top. If two creditors have the same interest rate, then place the creditor with higher repayment amount at the top.



3. Prepare a budget: You need to prepare a financial budget based on your monthly income and expenses. You should save extra money to pay off your debts. You need to cut down expenses on unnecessary things and save extra money.



4. Start paying your creditors: After making the minimum payment to all the creditors, make an extra payment to the creditor at the top of your list. In this way, your first creditor on the list will get repaid faster. As soon as you have paid your first creditor, continue the process with the next one and very soon you will be able to pay off your debts. You can also pay extra amount to pay off the debts with lowest balance, to reduce the number of your unpaid bills.



5. Stop using credit cards: As long as you owe money to your creditors, you should stop using your credit cards. Do not carry credit cards while you are shopping, so that you won't feel tempted to use them.



6. Negotiate with your creditors: You can negotiate with your creditors to get you a lower interest rate, or you can refinance your car or mortgage loan and pay off your credit card bills with that loan first. You can do the negotiation by yourself or can take help of third party professionals.



If you can follow the steps mentioned above with self-discipline and consistency, you can be debt free in a very short time.


Suzanne Williams is a contributing writer of Debtincome. She has sound knowledge in finance and loves to share it by writing financial articles on debt, real estate, debt income etc, for http://www.debtincome.com/. Go through her writings to get information on finance related issues.


Article Source: 6 Steps to Get rid Off Your Debts