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Step 1
Photo by lusi.INCREASE MINIMUM MONTHLY PAYMENT ON CREDIT CARDS. Paying even a little more than the minimum monthly payment on your credit cards is one of the easiest, most effective debt cures. For example, a typical minimum payment for a $10,000 credit card debt at 18 percent interest is $250. By paying only the minimum each month, it will take 31 years and 9 months (if you do not charge anything else) to entirely repay the debt. You will also have paid more than $14,615 in interest. By increasing your minimum payment by only $20 per month and not charging anything else, you will be debt-free in 4 years and 7 months, and save more than $10,000 in interest.
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Step 2
Photo by je1196.CONSIDER CHAPTER 7 BANKRUPTCY IF YOU JUST CANNOT PAY THE DEBTS. Chapter 7 bankruptcy sounds scary, but is still one of the most viable debt cures. New bankruptcy laws make it more difficult for people to file, but if you make below your state's median income you likely can qualify for a complete liquidation of most consumer debt. However, this is a last-resort solution, and requires discipline and new habits to avoid needing to file multiple bankruptcies in your lifetime.
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Step 3
Photo by jfg.CONSIDER A COURT-SUPERVISED OR A PRIVATE RESTRUCTURING OF DEBT. Chapter 13 bankruptcy enables people to keep their car and home while having consumer debts restructured and repaid over two to five years under court supervision. This is one of the most popular debt cures, especially since Chapter 13 cases cause less credit report damage and allow consumers to keep their assets. Most Americans should qualify. However, it is also not to be entered into lightly. An alternative may be to use a debt consolidation company, that does the restructuring for you at a fee. However, you lose a lot of the legal protections of bankruptcy and some companies charge more fees than is really reasonable. Those fees could go toward saving for the future, but as always debt cures rely upon personal preference.
