Do-It-Yourself Debt Management

: Chris Lee Law Firm

  Filed under: Debt

debt managementGetting out of debt doesn’t always take an army. In fact, many people have successfully navigated their way out of debt with a little focus and effort. Depending on your financial situation, you may be able to follow suit and find debt relief without the help of a third party company.

The Steps

It is important to really take a look at your financial situation first before deciding whether or not to take on your own debt relief plan. Although you may be behind on payments and working with a strict budget, you should be able to proceed. A good rule of thumb is to at least attempt to resolve your own debts unless you are experiencing a severe financial hardship, or a hardship that is expected to last a long period of time, or have assets at risk of liquidation.

If you are a good candidate for a debt management plan, there are a few simple steps you can follow to get on the path to financial freedom.

1. Review your debt accounts to determine which ones are high priority, such as secured debts, those with high interest rates or have a time limit for repayment.

2.  Create a budget of all your monthly expenses, including debt payments.

3. Identify areas of your budget you can eliminate or reduce excess spending.

4. Determine how much extra you can pay towards one or more accounts each month.

5. Identify and pay more than the minimum payment on at least one or more accounts each month.

6. Stick with your plan of spending less, paying more towards your debts until your accounts have been reduced to 30% or less of the total credit limit or paid off completely.

7. Always have funds set aside in a savings account or plan for credit negotiations in case your income changes or financial hardship strikes.

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