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Two Methods to Reduce Credit Card Debt

Posted by Unknown Monday, July 2, 2012 0 comments

The warning signs are all there. Your credit card bills are slowly increasing, while more and more you have to juggle your finances to pay everything on time. Even worse is if you miss a payment and face even greater challenges with penalty fees and increased interest rates. You know you need to take action to get your debt under control, but what’s the most effective way to pay back what you owe?

There are two methods to reduce credit card debt that have proven effective for consumers. Which method you choose is largely a matter of where you are with your finances and how you feel the most comfortable in paying them back.

Method 1: The Debt Meltdown Method

With this strategy of debt reduction, you focus all of your efforts to paying off your high interest rate debts first. Since these debts build faster with accrued interest, it is often more efficient to pay them off first. In the long run you save money because you pay less for interest added to your debts.

You start by taking aggressive action to streamline your budget as much as possible. This allows you to free up money that can be put towards reducing your debt. Reduce discretionary expenses as much as you can for a while and look for ways to reduce flexible expenses, such as food or gas. You may need to commit to eating at home more and taking your lunch to work, couponing, and finding people to carpool with so you can share the high cost of gas. Keep in mind these cutbacks are only temporary, so these expenses can be reestablished once your debts are paid.

Once you have as much money as possible, focus that extra cash on paying off your highest interest rate debt first. Pay all of the minimum amounts required on the rest of your credit card bills, but put everything you freed up from your budget to paying off one debt at a time. After you pay off your highest interest rate debt, move on to your next highest, and so on until you are debt-free.

Method 2: The Debt Rollup Method

In some cases – either because your highest interest rate debt is too large or because you can’t free up enough money to pay it off quickly – you may wish to use the debt rollup method instead. This strategy largely works in the same way, except you focus on paying off the debt with the smallest balance first.

This allows you to see a positive impact from your efforts faster. It can also help you gain momentum to tackle your bigger debts. After you pay off the first credit card, you can “roll up” that money with the money freed up from your budget to pay off the next smallest debt. With each debt you pay, you have more money available to pay off the next debt until you are completely free of credit card debt.

If you assess your budget and even the rollup method won’t allow you to pay off your debts efficiently, it may be time to seek help. Contact a trained credit counselor to get an assessment of your situation. They can evaluate your debts, review your budget, and provide options to help you find relief from debt.

About the author : Connie Solidad has been writing about finances and debt consolidation for years. She's an expert in the industry and writes about debt management and credit counseling options and resources. When Connie is not working, she loves playing with her two dogs in Tampa, Florida. To learn more about debt management refer to ConsolidatedCredit.ca.

Reporting Your Income When Filing Bankruptcy

Posted by Unknown Wednesday, August 17, 2011 1 comment

Guest post by : Bob Jones

When learning about filing bankruptcy, it's important to have a grasp on how to report your income. It doesn't matter whether you're filing Chapter 7 or Chapter 13 bankruptcy, income is income. When filling out a bankruptcy petition there are three types of income that are required to be listed. These types of income that are required are actual income, projected income and last of all the current monthly income. This is actually one of the changes that the bankruptcy code received in 2005. Prior to the code changes in 2005, the debtor that was filing for bankruptcy was only required to prove their actual income and projected income. At that time, that is what the bankruptcy court used to figure out if an individual is capable of paying back a portion or all of their debts.

When Congress was working out the changes to the bankruptcy code prior to 2005 they felt that actual income and projected income didn't give a true picture of the debtor that was filing bankruptcy. This is how the means test was conceived and added to the BAPCPA of 2005. Calculating the means test is how the debtor will come up with their CMI or current monthly income.

It doesn't matter if the debtor is filing Chapter 7 or Chapter 13 bankruptcy; they will be required to prove their actual income for the two years prior to the bankruptcy filing. Actual income includes all income, meaning any income from your work, investments, gifts and rental property. Technically, this is any money a person received no matter how they got it.

Also required for the debtor to show is their projected income. The projected income is the amount that the debtor can believe they will get in the near future. If the debtor is unemployed under our current job market in the US, it would be safe to say that number would be zero, unless of course they were receiving unemployment which would extend into the future.

Lastly, the debtor is required to figure out their current monthly income. This is figured using the means test, which uses the last six months income, multiplied by two. The debtor will then check the state's median income chart and see if they are under that amount to qualify to file Chapter 7 bankruptcy. This for many can get confusing and should be done with the help of a bankruptcy attorney. It's not written in stone if you don't qualify under the median income chart. There are other parts of the equation that a bankruptcy attorney will be able to figure out. Also included in the formula is comparing income over expenses which in some cases will qualify a debtor that has a higher income.

Bob Jones writes about bankruptcy and debt issues including file personal bankruptcy. For all you need to know about bankruptcy or getting a free bankruptcy evaluation visit http://www.debtfreebankruptcyattorney.com

4 Debt relief options that help you pay off bills successfully

Posted by Unknown Wednesday, June 15, 2011 0 comments

Are you in severe debt crisis? At first, stop worrying about it and then start working on a debt relief plan that can help you pay off all your bills/debts in a systematic way. You can take professional help if you’re not able to clear your dues on your own. Read on to get a brief idea on debt solutions – how professional debt relief options help you pay off your debts and get your finances back on track.

4 Ways to pay off debts

Here are 4 professional debt relief options that help you pay off your multiple bills/debts.

1. Credit counseling session : You should first go for a debt/credit counseling session whenever you start facing debt problems. In such a session, a credit counselor examines your financial condition and offers suitable suggestions to manage your debt properly. A counselor may also prepare a personalized debt relief plan for you by following which you can pay off your dues completely.

2. Debt management plan : A credit counseling organization may offer a debt management plan to you if suggestions and tips are not enough to pay back your dues. In a DMP or a debt management plan, a counselor, on behalf of the organization, negotiates with your creditors to reduce your loan interest rates. With your creditors’ approval, the counselor also finalizes a monthly payment that you need to pay towards clearing your multiple bills/debts. Thus, you can get rid of your debts with the help of professional guidance.

3. Debt consolidation program : There is not much difference between a debt management plan and a debt consolidation program. The only difference is that a consolidation program is usually offered by a consolidation company whereas, debt management plans are generally offered by credit counseling organizations. In a consolidation program, a debt consultant (on behalf of the consolidation company) negotiates with your creditors to reduce the interest rates on your loans, decides upon a monthly payment and gets it approved by your creditors. When you make the agreed upon monthly payments to the consolidation company, it distributes the amount amongst your creditors on your behalf.

4. Debt settlement program : You can take help of a settlement program when you have huge debts to pay off. In such a program, the settlement company negotiates with your creditors to reduce the amount that you owe to them. In most cases, the settlement companies can reduce the outstanding balance to about 40-60% of what you owe. In the meantime, the company asks you to stop paying your creditors for the time being and instead deposit an agreed upon monthly payment to a settlement account. You need to use this accumulated fund to settle the debt as soon as one of your creditors agrees upon a reduced payoff amount. Thus, you can get rid of your debts one by one by paying less than what you owe.

You can take help of a debt consultant if you cannot make up your mind as which debt relief program may be best suitable for you to clear all your dues. A debt consultant can help you to get brief idea on debt solutions along with making you aware about the pros and cons of each of the debt relief programs.

Comparing Debt Consolidation Loans

Posted by Unknown Monday, April 11, 2011 0 comments

Rough economical times have caused many people to turn to debt consolidation loans. These types of loans are especially desired as a form of credit card debt assistance . While everyone knows it is not wise to pay for everyday living expenses with a credit card, many people still do, causing them to become overwhelmed with credit card debt. The best way to address this type of problem is to turn to a secured or unsecured debt consolidation loan.

Unsecured Consolidation Loans

Unsecured debt consolidation loans are usually ideal for those debtors with a minimal amount of debt. This type of loan does not require any type of collateral, making it difficult for some people to obtain this type of loan. Since there is no collateral associated with this type of loan, most loans will have high interest rates; however, these interest rates are generally less than credit card rates.

Many times, unsecured debt consolidation loans can be obtained with either a fixed interest rate or a variable interest rate. For those debtors that prefer a predetermined monthly repayment amount, a fixed interest rate is the best type of rate to obtain.

Secured Consolidation Loans

Many times, if a debtor cannot obtain an unsecured consolidation loan, they will still have the option to obtain a secured loan. This type of loan requires some type of collateral, which many times will be accepted as equity in one’s home.

10 Small Steps To Carry You Out of Debt

Posted by Unknown Wednesday, March 30, 2011 0 comments

We often think of conquering debt in terms of the big actions that are required to get it under control. However, it is equally important to take small steps to get yourself out of debt. These small steps will not only help you to reduce your debt but will also help you save money in the future so that you don’t get into debt again.

Here are ten small steps that you can take to start getting out of debt:

1. Reduce your grocery spending by $50 per month. There are many, many tricks to reduce what you spend at the grocery store. These tricks are most effective, however, if you have a specific goal in mind. Track your grocery spending and spend $50 less next month than you do this month. Put that $50 towards your debt.

2. Give up one subscription. Select just one monthly payment that you make and give it up. It could be a magazine subscription, a cable TV subscription or a gym membership. Put that money towards paying down your highest interest rate credit card.

3. Spending more than $50 on an item? Look for a discount code or coupon. Of course it’s great to use coupons for everything but the whole coupon clipping process overwhelms many people. Focus on always looking for a deal on high priced items and you’ll have more money to put towards your debt.

4. Read one book about debt reduction. This will inspire you, encourage you and give you some fresh ideas about reducing your debt.

5. Sell five things that you own. Now is the perfect time for spring cleaning and de-cluttering. Identify five items in your house that you can sell. They can be small things, like books and CDs, or large items like furniture. List them for sale immediately and use that money to pay more down on your debt this month.

6. Pick one credit card to pay off and set a target date. Although it’s ideal to have all of your cards organized and a payment plan for everything, it can feel like a lot of work to people who carry multiple balances. Find the card with the highest interest rate and figure out a reasonable target date for paying off that card. Set your bank account to automatically make the required monthly payment to reach that target date.

7. Make one money-saving investment. For example, invest in a home energy audit to identify how to make your home more energy-efficient (and therefore more cost-efficient). Alternatively, invest in a good tune-up for your car so that it runs more efficiently and wastes less of that expensive gas you buy for it! This investment will be worth it down the line.

8. Give up one expense for one month. What do you waste money on? Do you smoke or go out to dinner frequently or take cabs when you could walk? Identify just one expense and give it up for just one month. See how much you save!

9. Find a money role model in your circle of friends. We all need to have people that we look to because they are smart with money. The easiest way to find a mentor is to find someone that you already know and can talk about money with. Brainstorm a list of your friends and acquaintances and figure out who your money role model is. Ask him or her one question about how they handle debt.

10. Repeat this phrase in the mirror every day : I can be happy saving money. Many people feel like saving money is a chore. It’s not. It can be a fun, creative way to live life. What is truly a chore is living with debt!

This is a guest post by Kathryn Vercillo. She writes about saving money for Discount Coder blog.

Reclaim Your Finance : Things You Should Do to Stay in Control

Posted by Unknown Tuesday, March 29, 2011 0 comments

When your finances are controlling your life, you will be unable to build the life that you want for yourself, because you will be governed by debts, interest rates and due (and overdue) dates. So instead of feeling helpless when it comes to your finances you need to know that you can reclaim control, and you can maintain control, so that you can direct your life and what you want, with your money following your orders.

How to Reclaim Your Finances

Before you can maintain control over your financial situation, you need to get it back to where it needs to be. For whatever reason you may be looking at mounting debts, bills over due and maybe even a mortgage in default. Therefore, before you can start maintaining good financial behaviours you need to first get rid of the evidence of your bad past financial behaviours. You can do this with the following steps.

1 – Know your credit report

Once you decide you need to regain control of your finances, the time for excuses and ignorance is over. This means you need to know exactly what is going on with your money situation and the best way to do this is to get a copy of your credit report. Your credit report is how the financial industry views you, and whenever you get a loan, apply for a credit card, or any other sort of finance, your credit report will be scrutinized.

Therefore, it is important for you to know the state of your finances because once you know the problems which are marked on your credit report, you can start working to fix them. You will also be able to identify if there are any errors or fraudulent entries on your credit report so you can be sure you haven’t been the victim of identity theft. When a bad report is made on your credit report that is a mistake, you can apply to have it removed from your record.

2 – Become debt free

This can sound like an insurmountable task if your finances are currently the ones in control, however, before you can start implementing good financial behaviours, you need to be sure that your mistakes from the past have been rectified. When you become debt free you will be able to live within your means and when you spend less than you earn you can save that extra amount at the end of each month, or treat yourself as reward for your new good habits.

3 – Change your attitude

Before you can reclaim control over your finances you need to reclaim control over your attitude towards money. You need to acknowledge that there is a problem and work to fix it, but that’s not all you have to shift in your mind. You need to change your perception of yourself and your life, to make it your goal to live within your means. Instead of lusting after a new pair of shoes and finally putting them on credit, think about putting them on lay buy instead and paying them off gradually, or saving up for things you want to buy.

How to Maintain Control of Your Finances

Being in control of your finances requires constant maintenance because it is easy to slip back into bad behaviours – that is why there are so many people just like you, who want to manage their finances better. To maintain control of your finances, you need to look at the following steps.

1 – Budget

This means creating a budget, sticking to a budget and maintaining a budget. It is not enough to do just one of these things, but you instead need to be committed to all three parts of new, controlled budget.

First, create a detailed budget of all of your income and every single outgoing expense from your car park costs to your mortgage and everything in between. Hopefully there will be some income left over after all of the expenses, and if there’s not, you need to look at where you can cut down – eating out less often, fewer new suits or making your own coffee at home before heading to work. While you want to cut down your budget so you spend less than you earn, make sure you are cutting in places which are maintainable, because longevity is the key to control.

Secondly make your budget easily accessible by having it on your phone, in your diary or on your computer. This will help you stick to your budget because you’ll be able to see at any point how much money you’ve spent, how much more is outgoing this week, and whether you can afford dinner and drinks out with the girls, or whether it needs to be a girls’ night in.

Finally, maintain your budget by entering your day to day spending as it happens. This will also help you remain in control because you’ll pick up on all of those incidental expenses you may have forgotten to enter in the beginning, and you’ll find new ways to cut back on your spending.

2 – Stay organised

Staying in control of your finances can be as simple as staying organised. When you know which bills are due when and how much money is in your accounts at any one time, then you can remain in control and avoid heading for debt and bad finances again. When you look at late fees and interest charges which can accumulate on bills and credit cards if you don’t pay them on time, you will want to find the note book, app or spreadsheet which works to keep your finances in order.

3 – Stop overspending

Staying in control takes creativity and practice because you often need to find ways you can save money, to ensure there is money left over at the end of the month. Therefore, consider whether you could cut back on incidental spending such as :

Buying your lunch at work, when you can make your own lunch at home.

Buying name brand groceries, when you can buy the cheaper store brands.

Scrounging for change to buy coffee or chocolates, when you could put your change in a jar at the end of each day and save it.

Expensive phone plans, when you could get a prepaid card and spend only what you can afford.

Credit card fees, when you can pay cash and save on surcharges and even negotiate discounts..

Rise in students credit card debt

Posted by Unknown Monday, March 21, 2011 0 comments

Now a days the ratio of credit card debts in students is increasing day by day as every students use 3- 4 credit cards for their minimal needs. According to a survey it has been seen that most of students are facing finance changes as they are not able to pay monthly payments on time. The median amount for credit card debts has increased to 3 times among college students in the last 5 years. As per Sallie Mae's survey the credit card debts among the students has increased from 373 USD to 939 USD in present days.

One of the most important reason in this rise in credit card debt among students is because credit cards are easily available now a days. The students using credit cards for their each and every needs.

A survey in 2007 reveals the fact that young consumers aged between 18-24 pay around USD 3 for every USD 1 in a debit card overdraft.

However its not true that credit cards are evil but the only thing which you need to understand is to proper use of it. Credit is helpful is so many ways like you can easily book your flight by this , you can pay your all types of bills online .It will help you in case of emergency. The thing which you need to do is to make your credit history strong so that in future it will be very easy for to take any kind if loans.

There are some steps which will help you to avoid credit card debts in your college life : -

1. Always avoid credit cards for your day to day purchases

2. You have to read the manual and guidelines for using credit card before the use because it will help you to know that how much you will have to pay for cash advances and late payments.

3. Always you need to be careful about tempting low interest rates, which don’t last long.

4 Above these all things , the main point is to payoff your bill in a monthly bases . It will be better for you to not use credit cards if you not financially fit to payoff your monthly payments.

Does debt settlement affect your credit score ?

Posted by Unknown Tuesday, March 15, 2011 0 comments

Debt settlement is the process by which you pay less than the amount you actually owe to the creditors, and they agree to accept and settle the debt with this payment. It can be negotiated if you are lagging behind the payments.

We opt for debt settlement when we try to qualify for certain loans that require good credit report with no outstanding debt. The debt settlement companies negotiate a reduced payment to the credit card company on behalf of the debtor.

How debt settlement is beneficial to your credit score : -

1. Rise in credit score : Settle your debt and request your creditor to delete your past credit record and your credit report would appear as settledÂ. After a debt settlement if you receive a statement stating paid it is best for your account listing. This listing does not have any negative or positive impact on your credit report or score. There will be a raise in the credit score on the deletion of the account.

2. Myth regarding debt settlement : There often a misconception that a debt settlement would not modify or increase the credit score. While settling your debt try to negotiate with the credit rating as that would have a positive impact on your credit score.

3. Debt relief improves credit score : Debt settlement is a debt relief option it's goal is to improve the credit score in the long run and that would enable the debtor to recreate a positive credit history once they are over with the program.

4. A good debt settlement company can be your savior : A debtor who has graduated from a reliable settlement company has innumerable opportunity to improve its credit score. As he is free from the burden of debt he can re-establish a positive credit line as you can highlight the fact that you owe zero balance to the creditors.

Opting for good financial adviser can help to pull you back on debt free track. The debt settlement initially might seem to be harmful but in long run it helps to improve your credit score as you pay off your debt. You even get an opportunity save a lot of money as the debtor pays much less than what he owes to the creditor.

5 important debt collection laws you must know

Posted by Unknown 0 comments

If you have huge debt and you are not able to pay it then your creditors will pass on your accounts details to the debt collection agencies to harass you and to collect the money from you. The main purpose of these debt collection agencies is to collect the unpaid debt from the persons who are not paying it and for the the bank give them commision on the payments.

The debt collection agencies will try their best to collect money from you and for this they will use lot of loopholes because they know the fact that most of the people don't know about these debt collection laws. So if you will get to know about these laws then they will not be able to go beyond the law .

Important debt collection laws : -

1. Harassment : Debt collection agencies are not authorize to harass persons when they are collecting debts and if they do so you can take legal action on them. They are also not allowed for any kind of noise or violence activity and they can't threaten to file legal case against you or confiscate your home.

2. Calling at inappropriate time : They are not allowed to call you at inappropriate time . According to the law the debt collectors are bound to call you in between 8. a.m to 9.00 p.m . Must must need to keep this in mind because its most important collection law.

3. False claims : Debt collection are not authorize to do false claims on you regarding you unpaid debt. They are not authorized to say that " you have done an criminal offence and they can take legal action against you " . They can't misguide you by represent themselfves as a government employee.

4. Divulge information : The debt collection agency is not authorize you share your personal information to any other third party apart from your lawyer , gurdian , spouse etc

5. Debt validation letter : After initial communication of 5 days the collector ought to send you debt validation letter . In the validation letter they have to mention the total debt amount of yours and the name of your creditor.

If you collectors violate these laws then you can file case against them and if you win the case , the debt collection agency will need to pay you the damages or the judge may also order them to pay you an amount more then your damages .

Find Your Debt Relief

Posted by Unknown Sunday, February 27, 2011 0 comments

It is often hard to admit you are having money troubles. It is even harder to ask for help. As Americans we have pride in ourselves, and want to be able to support our families without the help of others. Unfortunately, this sense of pride can lead to substantial amounts of debt. That same pride can cause us to fall deeper and deeper into debt as we continue to charge purchases we need or want to a credit card. It is not to say people should not have pride, but rather to realize when our pride needs to be set aside and we need to ask for help. There are options to get you out of debt and back on your feet.

One option for those of you in debt is to seek a professional company that offers debt settlement services. You may find by arranging a settlement for your debt you can get out of debt in as little as 18 to 60 months. You will work with professionals to pay back the money you owe to credit collectors, and often the money paid back is less than what you owe. However, you should be aware that this type of settlement will hurt your credit, but will not hurt nearly as long as bankruptcy, since you are paying back a large portion of the money you owe.

However, if a settlement is not right for you, you may want to consider other debt consolidation companies can help you manage and pay back your debt. Finding a solution that is right for you is just a click or phone call away. By hiring a professional company to consolidate or settle your debt, you will free yourself of worry and get on the right track to a better financial future.

Debt Relief Plan

Posted by Unknown Monday, February 7, 2011 0 comments

Americans are besieged on explanation of the money they have a loan from on their credit cards and are very much looking for debt relief plan which will permit them to leave in for amazing similar to a settlement.

By selecting for a payment, once consultation with a credit card corporation is in excess of, you will discover that you have to shell out back a portion of what you allocated. This is because the excessive interest charge is hacked radically charges and fee often surrendered. Additionally, numerous are also providential adequate to be agreed an comprehensive stage of instance in which they be able to give the dues.

There are numerous debt relief plans which ought to be reserved in mind. When it is moment to get rid of debt you contain to make in no doubt the relief system and the settlement company functioning for you are on the positive position.

Things to observe : -

A settlement rigid ought to never inquire you for money up front nor ought to that they inquiring you for information of your bank account on the excuse they require them to permit them to shell out your payments for you.

A lot of people have originated this away the firm way and unquestioning the settlement corporation, revealed all their financial facts. It was merely a subject of time previous to they get up and originate their complete investments had been fresh away from the bank.

And while money was specified up face they establish that no labor was being accepted out and the settlement corporation merely assembles on its hands. Evidently, the client had been spited off. When it comes to debt relief plan, most of it is general logic.

You have to be acquainted with not to faith anyone who assured to assist you for a charge. But formerly you discover the correct settlement corporation and consultation are in excess of, you will discover that you will be paying reverse a simple portion of your previous credit card equilibrium and burden so reasonably.

Before leaving in for a little like a settlement, you contain to build confident to understand you the whole procedure and how you locate to expand. With progress knowledge, you will discover you locate to advantage the large amount and can also keep away from being taken for a travel.

What to know about debt validation

Posted by Unknown Saturday, August 14, 2010 0 comments

People troubled with debt often use methods like debt settlement but you might want to
try debt validation first. In case you are wondering what is validation of debt read on to know more.

What is validation of debt?

Validation of debt is when you try to find out whether the collection agency that is asking
you for money has the legal right to ask for it. You may not be sure that the debt being
asked from you is yours. In that case you have full rights to ask the collection agency or
collector for proof that you owe the debt.

The agency needs to provide the following
1. Proof that the original creditor has assigned the debt to the collection agency.
2. Some account statements from the creditors.
The right to dispute the debt and receive proof of it is part of consumer rights under the
FDCPA.With debt validation you avoid paying on debts which you don't owe at all.

Best Debt Consolidation Options

Posted by Jim Saturday, May 16, 2009 2 comments

Today every Americans are under the huge burden of debts. Everyone is under the burden of unbearable burden of debt, irrespective of huge businessman or a common man. Everyone likes to come out of this debt and take a breath of debt free life.

You can find many options available in the market that tells you to help you to be debt free. But everyone is confused which can be helpful for them. Here I am trying to focus on some best option to get out of all your mountain of debts.

1. Bankruptcy :

The most popular option to alleviate debt completely is to take the help of bankruptcy laws. But this option does’t work always. In some cases like child support, student loan or debt to government, bankruptcy will not help. It can help you in case of credit card debt, car debt, loan or mortgage. You can book an attorney and file your bankruptcy to get the relief from debt. This option has some worst sides too.

2. Home Refinancing :

The persons who has house with some equity, can opt for the best debt consolidation option to get out of the debt which is Home Refinancing. They can refinance the mortgage and can use the equity to pay off the pending debts. You can use this method to pay off your all types of debts but before taking decision everyone should check its all pros and cons.

3. Debt Consolidation Services:

Debt consolidation service is also one of the best options you can try. Some provide it for free. You can get rid of most of the debts by settling the debts. If you have huge amount of debt then you can have to shell out lot money for this service.

Clear personal debt and have calm life

Posted by Jim Saturday, October 11, 2008 0 comments

To get out of personal debt and change your financial picture, here are some excellent ideas that I have found in cnn.com

1. Figure out Full Financial Picture : Try to figure out your total financial picture. Find all the bills, debts, credit cards, mortgages or other loans and figure out your financial condition.

2. Payment of Important Bills : Now go to pay your important bills first. Basic food, home. health are the most important.

3. Have a talk with creditors : If you missed any payment, call the creditor and try to find out a payment plan with his help. If he favors you can find minimum interest rate and negotiable monthly payments too.

4. Transfer balances : You can opt for balance transfer if your one card is charging high interest rates. Some cards provide 0% interest rate for 12 months in case of balance transfer. Find the lowest rate and pay it without the burden of interests. But be sure most cards can charge a balance transfer fee.

5. Skip credit card : To save you from drowning under debt, prepare yourself and use cash or debit card instead of credit card. This way you can keep the interest rate under control.

6. Prioritize the debt payment: Start paying off the credit card debts. Pay the credit card due that has highest interest rate.

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