Be Debt Free

By Philip McClarence

Debt affects millions of people today. Bankruptcies are on the rise and more and more people are struggling to stay afloat.

The effects of bankruptcy can be far reaching and can impact people's lives long after the bankruptcy has actually ended, making it difficult to obtain credit and even spoiling many employment opportunities when companies credit check potential employees.

Often the situation has gotten so bad that there is no other choice, however, for many, there may still be time to turn things around, if you start right away!

47% of credit card holders pay only the minimum amount on their cards each month. This is the worst way to pay them off, guaranteeing that you will still be in debt for many years to come.

It is part of our culture and what seems to be our consumer ethos, to buy now and pay later. We feel that we are owed what we want and should have it without working for it. The problem is that we end up having to work for it anyway and even harder than if we had worked for it first!

Fortunately, there is still time for most of us to avoid the inevitable if we make the change now. Here are my top 7 tips to get you out of the debt trap.

Tip 1. Put it all down on paper. Make a list of all of your debts. It sounds like an easy task and it is. You need to write down your creditors names, total amounts outstanding and monthly payments. Be prepared as it can be a bit scary especially if you haven't listed them all before. But don't worry -- you'll get on top of it.

Tip 2. Work out which debts to focus on. One good strategy is to only pay the minimum payments on all of your debts except one which you deem to be the most pressing. (Normally the one with the highest interest but it could also be pressing for other reasons.) You pay as much as you can to that one until it is paid off then you add the payments for that one to the next most pressing debt. This can significantly shorten the amount of time it takes to get out of debt.

Tip 3. Get rid of your credit cards. If you don't have them then you can't make it worse by using them. It may be scary at first but you will soon get used to managing without them.

Tip 4. Take the time to examine your Credit report. You can get a copy of your credit report from a number of sources online now. Most of these services will also send you alerts when it is updated. This can help you stay on top of identity theft. The most important reason to check it out though is to make sure that you have no black marks on it.

Tip 5. Write down and stick to a budget. When you stick to a budget, it fills you with confidence that you can make a positive change and break free of your debt trouble. It also makes it much more likely that you will because you know that you are working everyday towards improving your situation.

Tip 6. Never swap unsecured debt for secured debt. Companies will throw offers at you once they learn that you are in debt trouble and you are a home owner, but they will repossess your home at the first opportunity if you start missing payments, so don't do this unless you have no other option and always seek impartial advice first.

Tip 7. Get help. There are many sources of free help out there for people in your situation. They can advise you on your rights and the options open to you. Also, it helps to talk to someone impartial and to know that you are not alone and that there is always a way out!

'My Debt Free Life' is the premier independent advice site on the internet for help on becoming Debt Free as well as information and advice on Debt Consolidation. We are always ready and willing to answer any questions or help however we can.

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