getting out of debt - it starts to you

"Think positive, save and discipline will sure get you out of debt."

Everyone in this world are not new in the "handling debt" tips. But even it is spread all over the internet, why does fixing debt is seems hard to fix? Well this is my checklist and tips:

Step 1: Evaluate debt

Collect all your financial documents and print out your credit reports to see exactly where you stand. This is an important step toward debt recovery and one that people are often scared to take. On a piece of paper, write down the balances, interest rates, and monthly amount due for each of your debts. Include your auto loans, personal loans, payday loans, credit cards, and other debts. You should also make note of any annual fees on your credit cards.
You don't need to include your mortgage loan or student loans at this time. These loans have relatively long terms and low Annual Percentage Rate (APR) so it is better to focus on paying off your other debts first. If you have an overwhelming amount of debt, you may want to request a free professional debt help consultation.
You didn’t get into debt overnight, and you won’t get out overnight, either. But if you want to get out of debt – if you really want to get out of debt, you need to have a plan. And you need to stick with it.

Step 2: Budget Breakdown

After you have collected the information about your debts, you should take a look at your monthly budget. Write down your monthly income after taxes and subtract your house rent/mortgage payment from this amount and other monthly expenses such as childcare, student loan payments, insurance, utilities, and groceries. Once you have subtracted all of your necessary expenses, calculate how much you have left to pay off your debts. If this amount is too small, look for ways to reduce your spending. Consider turning off some of your personal expenses (like buying new clothes, cable subscription, gasoline and others alike that you can squeeze). The more you can pay towards your debts each month, the sooner you will be debt free.

Step 3: Debt Solution Plan

Now that you know all about your financial situation, it's time to create a plan for reducing your debts. No matter how hard life can get, no matter how much debt you have, the one thing in life you can control the most is how you think.

Step 4: Debt Negotiations

You may be able to lower your interest rates or negotiate a reduced settlement on some debts by speaking with the customer service department. It is especially easy to negotiate the terms of debts that are charged off (dismissed) by the creditor or in collections already. Also think about moving some of your credit card debts to new accounts with lower interest rates. Moving a balance to a credit card with a 0% introductory rate for 6-12 months can help you save a lot on interest. Just be sure to keep each of your credit card balances below 35% of the credit limits to avoid damaging your credit score. During this time, investigate if consolidating your debts into a personal loan or home equity loan could help too.

Consider using a debt reduction program:

• Credit counseling - If you have high interest rates on your credit cards, working with a non-profit company will help you lower those high rates, and combine your credit card bills into one lower monthly payment – which means more of your money will go towards reducing your debt!
• Debt consolidation loan - If you own a home, you can consider taking out a home equity loan to pay off all your credit card bills, lower you interest rates, and possibly deduct the interest on your taxes.
• Debt settlement - If nothing else is working, and your debt is still overwhelming, then you should consider debt settlement. This is a more aggressive approach, and is not right for everyone, but if you’re considering bankruptcy, this is a good option. You can pay off all your credit card bills at a savings of 40-60%, and get out of debt much quicker (you may contact some financial institution to help you with this one).

Step 5: Update Debt Fixing Solution

Do your best to meet your payment goals each month. It's okay if the amount you put toward your most expensive debt each month varies. Just try to consistently put as much as possible toward your debts. Signing up for an automated payment system and keeping a chart of your progress on the refrigerator can help you stay on track. When you reach major milestones, be sure to celebrate your success. Before you know it, you'll be debt free!

Step 6: Communicate

If you’re not sure or you can’t fix your debt aside from these tips, talk to some financial institution. Look for a non-profit organization if you are looking for free service on fixing debt. Research for some reputable debt management company; try to communicate them and get free advices.