How to Pay off Your Debts

Having too much debt can cause stress and hurt your credit score and affect the ability to get a home loan, auto loan, business loan, apartment and even a job. A diligent, methodical approach often is needed to pay off debts.

Instructions

1. Create a list of your debts. Include business names, addresses, phone numbers and amounts owed. This information is on your credit report or the bills you receive in the mail. Track credit card debts, loans and medical debts.

2. Prioritize your list based on the amounts of your debts and when payments are due each month. Plan your payments, trying to pay as much as possible and on time. Paying off smaller debts will help you gain confidence and ease of mind.

3. Figure out how much money you can put toward your debts every month. Create a budget and stick to it, allowing as much money as possible for paying down your debts.

4. If your are being contacted by debt collectors, try to set up a monthly payment plan.

Tips & Warnings

• Sign up for Debt Goal, a free online service to help you with paying off your debts. Make debt reduction part of your daily purchasing decisions. Weigh the needs of a prospective purchase against your goals for reducing your debt.

References

• Debt Goal
• LA Times