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Be Debt Free - You can make it if you follow these 7 tips.

Sep 3, 2008
Debt affects millions of people today. Bankruptcy's are on the rise and more and more people are struggling to stay afloat.

The effects of bankruptcy can be far reaching and can impact people's lives long after the bankruptcy has actually ended, making it difficult to obtain credit and even spoiling many employment opportunities when companies credit check potential employees.

For some, it may be their only option but for many, there may still remain a chance if they take action.

Consumers in general now carry a huge amount of revolving debt on credit cards and 47% of people who don't pay off the full balance each month pay only the minimum balance, a terrible strategy for paying off your credit cards and a very expensive one.

It is part of our culture and what seems to be our consumer ethos, to buy now and pay later. We feel that we are owed what we want and should have it without working for it. The problem is that we end up having to work for it anyway and even harder than if we had done it first!

It is time to take a stand and make a difference in your life and to help you do that, here are the 7 top tips to help you become debt free.

Tip 1. Put it all down on paper. Make a list off all of your debts. It sounds like an easy task and it is. You need to write down your creditors names, total amounts outstanding and monthly payments. Be prepared as it can be a bit scary especially if you haven't listed them all before. But don't worry; you'll get on top of it.

Tip 2. Prioritize your debts. Which are the most pressing debts? If you stand to lose something (like your house) by not paying then that is the most important debt. Next, if you have already had trouble and have come to an arrangement with a creditor, you should try to stick to it. Next, list your debts by interest rate, highest to lowest.

Tip 3. Destroy your Credit Cards. While you still have your credit cards, there is always a chance that you will use them. No matter how strong you think you are, there may come a time when you are weak and will use them. If you don't have them then you can't, so get rid of them! Don't forget to cancel them with the issuer when you have paid them off otherwise it will still show on your file as available credit.

Tip 4. Examine your credit report. Your credit report shows you your payment history. You can get a copy cheaply from many places online. You should check it for any errors that could harm your credit rating and write to the companies concerned to have them corrected. This will ensure that your credit problems do not cause you trouble into the future.

Tip 5. Make a budget and stick to it. A budget can be the single most important step that you can take to not only get out of debt but also to ensure that you start to prosper financially, no matter where you are now. It is actually pretty easy to do. You can find easy, free instructions on my website on putting your budget together.

Tip 6. Don't switch one debt for a worse one! If you are a home owner, it may be tempting to take out a loan secured on it to pay off your credit cards. This can backfire badly though if you fail to keep up the repayments because now your creditors can take your home away from you. If you are considering this route, you should seek professional help from someone who does not stand to profit from you first.

Tip 7. Don't do it alone. There is plenty of help and advice available to you; you just have to look for it. Talk to debt charities, I guarantee that they won't be surprised or shocked no matter how bad your situation is. They will however be able to offer good and helpful advice.
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