Get out of Debt - Top 7 tips

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

For those that don't manage to avoid bankruptcy, the effects can stay with them for many years. The stigma that was once attached to it has lessened but it can and does still cause many difficulties for its victims. For example, It can cause you trouble when you apply for a job because employers can now credit check you.

For some, it may be their only option but for many, there may still remain a chance if they take action.

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

If this applies to you, you are not alone. It is constantly hammered into us through T.V. and advertising that it is ok to spend money before you have earned it and many of us have been fooled. The problem is that this way only traps you into a life of working hard for someone else. That doesn't sound good to me!

All is not lost though, for most people, if you take action now, you can probably still fix the problem and start living a debt free life!

Tip 1. Take stock of where you are. The first step is to make a list of exactly where you are, so write down all of your debts and monthly payments as well as totals outstanding and interest rates. This simple exercise will make everything much easier as you go on.

Tip 2. Decide what your most important debts are. You may want to pay off a few small balances first to get some small wins. Otherwise, you should pay everything that you can to the debt with the highest interest while paying the minimum to the rest. When you have paid that off, you should take all of that amount and add it to your payments for the debt with the next highest interest and so on.

Tip 3. Cut up those credit cards! Don't just put your credit cards away somewhere and defiantly not in your wallet. Cut them up so that you won't be tempted to use them. When you pay each one off, contact the company and cancel the account. Don't fall back into the same trap!

Tip 4. Check out your credit report. It's worth making sure that no companies have put black marks on your report. If they have and it's a mistake then you should contact them and get it fixed. If it is not a mistake, you should still contact them, try to pay the debt off and see if they will remove the mark. It is worth it down the line to have a clean credit report.

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. Think carefully before switching loans. More specifically, if you are thinking of switching from unsecured debt to secured debt (secured on your house for example) then think very carefully about it. You should only ever do this as a last resort as this will up the severity of the possible consequences for you.

Tip 7. Don't do it alone. There is plenty of help and advice available to you; you just have to look for it. Talk to debt charities, I guarantee that they won't be surprised or shocked no matter how bad your situation is. They will however be able to offer good and helpful advice.

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