John E. Pytte Jan. 4, 2018

piggy bankAlmost every American citizen suffers under some sort of debt, although many would rather not admit it. But for the millions of Americans living under crippling debt, and the thousands who want to get out of debt, they cannot think about anything else. Debt is a vicious cycle that can leave a person constantly stressed and in fear of losing everything they own. Here are some forms of debt and ways in which a person can work their way out of a debt spiral.

Step by Step

In order to get out of debt, the first step is to find out exactly what you owe. Make a list of all of your assets and all of your debts, including interest rates, the terms of the loan, and when the loan should end. Compare that list with a list of all of your income, including your general salary and the possibility of investment or other subsequent income.

Step 2 is to compare these details with your average monthly budget. This comparison will show you when you will eventually be able to pay off your debt, even if that date is far into the future. If you are not making more than your debts are, that will also soon be clear. In order to ease the calculation process, you may consider entering these details into an online spreadsheet. The spreadsheet will allow you to gauge the impact of different financial situations onto your debt service payments.

Once you have divided up your assets, your income, and your debts, step 3 is to prioritize and rank them. Certain forms of debt, such as IRS debt and specific student loans, can be negotiated down. These debts should be placed in a class of their own and negotiating strategies and help should be consulted as soon as possible. Another category should be made of debts that need to be discharged, either by sales at a loss or the closing of credit lines.

Finally, step 4 is to look at different ways of reducing expenses and increasing income. There may be superfluous sources of spending that can be easily curbed, such as a weekly trip to the movies that may start to happen only biweekly. A person under debt may also want to pick up extra hours at work to improve income or start a second job. There are a myriad of online income opportunities that can allow a person to bring in money while they are sitting at home or taking care of children. All of these opportunities must be taken into consideration in order to pay off the debts that simply cannot be ignored or negotiated down.

Get Help

You do not have to take these steps alone. Financial counseling is an important step in the debt-reduction process. Counselors often have years of experience helping people out of debt and showing them which approaches work and which do not. They can tell what situations are appropriate for debt negotiation or debt-restructuring programs. Counselors can assist homeowners in refinancing their mortgages and using reverse mortgages when possible.

Debt is a burden that can be shaken by many people who are currently affected by it. It may take many years and a significant amount of hard work and creative thinking, but people can start to reduce their debts by making them manageable and then taking in more money than they pay out. With the right approach and a little help, people crushed under the weight of debt can start to work their way out and make themselves whole once again. Call Attorney John E. Pytte at (912)417-3872, or fill out an online contact form for your free consultation and see how he can help you live free from debt starting today.