How to Pay off Debt, Quickly

It's definitely challenging because you didn't rack up your debt over night, but it is possible to pay off a sizeable amount of your debt quickly. Paying off debt is one of those satisfying activities that make you feel very responsible and able-bodied. Read this article for one strategy that may help to pay down your financial obligations, start fresh, and maybe improve your credit. Good Luck!

Difficulty: Challenging

Instructions

Things You'll Need:

• debt
• anywhere between 10 months and 2 1/2 years.

1. You will, of course, start with a list. Keep it small and manageable so that it will be easy for you to gauge how well you're doing. Include any credit cards for accounts that are still open and in somewhat good standing, back utility bills on accounts that are still active, and possibly your mortgage if you're in trouble with that. For know, forget about medical bills, accounts on store charge cards, any debt that is over 3 years old, and any debt that is not affecting you directly (like old magazine subscriptions that are in collections). Be sure to also include on your list overdraft fees on old bank accounts to get you off of systems that check for account delinquency, back taxes, back child support, and defaulted student loans (those last three will haunt you forever if you don't get them eliminated). Shoot for a list of about ten debt accounts. You can start another list when you're done with your first list, if you want.

2. Beginning with the first account on your list, the most pressing, or the smallest debt make a good faith payment using an amount you can comfortably afford and pay it. Continue to make this same payment until that account is paid off and crossed off your list. You may have to contact companies to set up a payment plan, but I bet that once they see some payments coming in, they'll back off and let you do your thing.

3. Once finished with that account, take the same amount you were paying on that account and apply it to the next account on your list along with an additional ten percent. Pay this debt off and cross it off your list. What you're doing is getting used to not living with the money going towards your payments. So once you're done making payments on one debt account, you can comfortably apply it to another account, instead of using that money as extra spending cash.

4. So let's say you have successfully paid off two accounts. Take the total sum you had been paying on those two accounts, apply this same total to your next account along with an increase of ten percent.

5. Continue re-applying previous payments to each subsequent debt on your list until on your final debt account you are paying the sum total of all previous payments made on earlier accounts on your list. You never know. The total payment on accounts further down on your list may be enough to completely eliminate a debt in a single payment. Don't be surprised, either, if you're making double payments on your mortgage or other large debt account if you've included these on your list.

Tips & Warnings

• If you want to pay down your debt even faster, take the payment you were making for the previous account and double it for the next account. But this will probably only work up to a pre-determined amount based on your income.
• Remember that you didn't generate all of this debt overnight, so it isn't going to go away overnight. A good time frame would be anywhere between ten months to 2 1/2 years.
• Good Luck!
• Keep your current financial obligations in good standing. For example, don't spend the rent money or grocery cash on your debt.
• No matter what they say, no one is going to arrest you or cause you physical harm if you don't pay on a debt account owed. Don't be intimidated into using cash you simply do not have.
• Only large institutions like the Federal or State government will be successful in garnishing your wages. If another company threatens this with you, fine. It's too much of a hassle for them to actually go through all of that effort. In short, if you don't have the money, you don't have the money. Don't let them intimidate you into using money you need for other things.

[xxdesertash]

on 1/26/2009 Great article! Very informative! Thanks 5*