A Bankruptcy Lawyer’s Blog

Pay Back Debt Fast to Avoid Bankruptcy

Have you ever gotten yourself head over heals in debt and don’t know how to get yourself back out? Bankruptcy should always be the very last resort as it will affect your credit for as long as seven years. I’ve been in debt before and I have a pretty successful basic plan to attack it, below is my debt reduction how to guide.

First things first, figure out what the lowest amount of money you could possibly survive on. Make sure you allow yourself money for things like gas and food.

Next, we need to eliminate any excess spending. If you go out for lunch, dinner or buy daily coffees, stop. You are just wasting money on unneeded expenses. Even $2 a day on coffee translates to over $700 a year. That is money you could be using to reduce your total debt load.

Next, organize your debts; list them from smallest to largest. We are going to reduce all our bills to the minimum payment, and put all our extra money into the smallest debt. Focusing on one debt at a time will allow you to eliminate debts quicker and provide you a sense of accomplishment every time one is eliminated.

If you can’t afford to pay all your bills, get a part time job. If your bills cost more than you are making you don’t need to read 100 how to guides to figure out you either need a raise or another job. I know nobody wants to work any more than full time, but sometimes you have to buckle down and work like a dog in order to get things done. Ideally try to find a part time job that will pay you a base salary plus commission. This way, if you are a good seller you can make much more than a basic wage. Apply any and all of the money outside of what you require for basic living to your debts. Even if you work only 1-2 days a week, if you make $10-15 an hour you are bringing your debt down by $80-160 a week; $4160-$8320 a year!

Put away a very small amount of money each paycheck for personal savings! Even if you are only putting away $20 a paycheck, after a year you are looking at $520. I would suggest using this money as a reward; tell yourself that if you can eliminate your entire debt load you can use this money for a vacation or some sort of personal gift. If you get used to saving money in this manor, in the future you won’t re-rack up your debts.

If you follow these steps, you should notice your debt starting to dramatically reduce in just a few short months. Good luck and happy saving!

Ryan writes racquetball articles for hobbystop and enjoys playing sports in his free time.