How to Recover From Debt

Video Transcript

"Hi my name is Maria Enomoto from Consumer credit counseling service. And we are going to be talking on how to recover from debt. If you are really deep into that or you are carrying a balance that you want to pay off and you want to recover from debt, the first thing, the first step that you need to take is to work out of spending planner or budget for your household. You need to make sure how much income you have, you need to make sure how much are your expenses. And here you not only count the basic ones which are usually rent, mortgage or food or gas, but also work on a detailed one. Just to make sure that you know where your are spending your money. And nothing is going to be left behind because you forgot. So first thing work a really, really good household budget. After this you will know how much money you will have to pay off the debt. Second step here is you need to cut your used debt, credit, you need to leave the balance of the debt that you have as it and not increasing it. Ok so you stop using your credit cards, you stop using any line of credit or personal loan that you may have available and that 's the way that you are going to be stop it and you are going to be in a light of the end of the tunnel when you are trying to pay off this debt. You need to make sure how much you are paying them because it's better to pay more then the minimum that's the only way to assure you that you are going to pay off the debt and you are going to be paying sooner of course saving some time and saving some money on interest. You need to make a list of all the creditors that you have. You need to make sure how much is the amount of money that you owe and how much interest rate that you are paying on them, because probably if some of them is higher, is charging you a higher interest rate and if you still have a good credit score a good credit history, you are going to be able to probably work your own consultation by transferring the balances and paying out a lower rate. But of course as I mentioned before you need to stop using the credit cards, you need to stop increasing your debt. And the best thing to do it is to make your budget to make sure that your income will be enough to cover for your living expenses. And to of course pay for any debt that you may have accumulated."