Potential Exit Ramps To Get Off The Road Of Debt

Author: Scott Burleigh

Potential exit ramps to get off the road of debt

As scary and stressful as debt can be, making your way of it isn't an impossible dream. A wide variety of possible solutions to this difficult issue can be found if you start looking carefully. Some will be perfect for some and ill-suited to others, so you have to be discriminating in your choice to find the one that's right for your situation.

Those who are experiencing a level of debt that is troubling but not incredibly serious may be able to work their way out of it by developing a more stringent budgeting process.

Divide your monthly expenses into costs that don't change - car payments, insurance premiums, rent or mortgage payments and utilities with fixed rates. Then write down those that change, such as groceries, clothing, recreation, transportation and variable utilities. Weigh this amount against your total debt, and figure out what you can prioritize and what you can afford to trim from your spending.

If your situation is more drastic, a budget alone won't be enough to guide you out of debt. For home and auto loans that are particularly problematic, you'll want to contact your creditors as soon as the problem arises to avoid foreclosure. They may be willing to suspend payments for a time, or offer a more reasonable repayment plan.

For credit-related debt, you can look into credit counseling, a debt management plan (DMP) or debt settlement. The latter is the riskiest - you're more likely to run into disreputable organizations offering this service engaging in shady practices.

DMPs involve monthly payments to the organization offering the plan, which are put towards your outstanding debts. Only accept this option if a reliable credit counselor recommends it. Credit counseling, then, is the first step to take - you have to fully understand the magnitude or your situation before responding to it. 

What debt solution do you think would be best for you?

In Brief

  • As scary and stressful as debt can be, making your way of it isn't an impossible dream.
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