If you’re worried about your soaring debt amount, you need not fret as you can control them and stop them from rising with little dedication and prior planning. Though there are debt reduction agencies that can offer you with professional help and assist you in reducing your debt burden, yet what’s the use in paying the debt consultants for things that you can do on your own? Once you know the tricks of the trade and you’re fully committed to get out of debt, you can soon reduce your debts on your own and live a debt free life. However, before taking the decision of reducing your debts, you should be aware of the fact that debt reduction hurts your credit score as you’re paying back an amount that is much less than what you actually owe. Don’t get disheartened to know this as there are ways in which you can boost your credit score with debt reduction. Check out the do it yourself steps to debt management.
- Calculate the total debt amount: The first job that you need to do is to calculate the total debt amount that you owe so that you’re aware of the exact amount that you have to pay back. Jot down the total outstanding balance, the interest rates that you’re paying and the due dates on which you have to make payments to the multiple creditors. You can also make a list of all the sources through which you earn money in a particular month. Before taking any step, you should know where you stand financially.
- Formulate a budget: Another task that you have to do is to formulate a budget so that you can keep a close watch on your pennies. Unless you track where your pennies are going, you can never rein them. Remember that following a budget is not about pinching your pennies, you just have to make sure that your pennies are not spent on things that you can do without.
- Make a plan and start negotiating: While you’re about to follow a repayment plan through which you can become debt free, you have to make sure that you negotiate with the creditors. Unless you tell them about the financial hardship that is barring you from making the payments on time, they won’t be able to take any step to alter the repayment schedule. Don’t refrain from seeking help of your creditors as they’re the ones who can help you.
- Write a debt negotiation letter: This is a written proof of the fact that you want to settle your debts for an amount that is much less than what you owe. Mention the amount you owe, the amount that you want to settle it for and the mode of payment that you want to continue with. Also mention the reason that is actually barring you from making the payments.
- Start making the monthly payments: If you choose to repay the remaining amount in small and affordable monthly payments throughout a stipulated period of time, start making them so that you can move forward to the path of a debt free life. This will enable you to get out of debt as soon as possible.
Therefore, when you’re wondering about the ways which you can get out of debt, you may opt for debt reduction on your own. Take the above mentioned steps and forget leading a life with debts.