If you are behind on some of your bills like most of us, you may want to read this article with some special interest. There are people who tell you that they’re going to do work on reducing their debt and there are others who don’t talk, they just get it done. Where do you fall into this category,  are you a talker or a person of action?

I hope that you are one of those individuals who talk less and do more by cutting down your debt before it gets any larger, you are on the right track. Reducing debt takes courage and resiliency and those who can this you should be very proud of yourselves.

In looking at the latest figures on the amount of debt outstanding in each household, some of us have made some progress in reducing their debt the past three years. However, according to the National Debt Relief corporation, there are still too many people who are in trouble handling their debt.

In order to get out from under this cloud of doom, you have to be mad enough to want to get out of this mess. We need to develop a strategy that will help you to resolve this problem before it gets worst.  Many of us have tried paying the creditor who makes the most noise, but as the late fees kept rising, we feel like we are still stuck in a financial black hole.

Allowing the problem to linger instead of trying to do something is what I believe is the bigger issue in trying to reduce our debt. Too many of us, we elect to push this off to a later date and that is when it gets harder and harder to take care of. However, at some point, we are out of control so much that we want to throw up our hands. I have personally thrown up my hands when I was deep in debt,  so I know what that frustrating experience feels like. Also, you won’t dare discuss this issue with anyone, as you are disappointed that you are in this situation.

So how do you come up with an effective strategy to lower your debt you may ask?

And my reply is that you can start by using one of the examples noted below. I know so because these plans have worked for me, and for others like me, who have been in financial trouble themselves.

In one approach, make a list of all their outstanding bills and attack them relentlessly one at a time. They will stay on this course of cutting their debt until their bills are eliminated. They start paying the largest bill and working themselves down to the smallest bill. As that bill gets eliminated, it encourages you to keep it up for the next one. The point here is, you don’t jump around and address another bill until this one is paid off.

There is another strategy,  where people will make a list of all their outstanding debt in order of the ” Interest Rates “.  In order to make sure that they get the most optimal use of their funds, they pay the bill that has the highest ” Interest Rates ” as their top priority.  They begin to pay the other bills according to the next highest interest rates and stay on this course.  In using this approach, you not only chip away at your most expensive debt outstanding, but you will see your credit scores start to rise. As your credit score rises, more opportunities will be given to you to borrow money cheaply, so that you can pay off the old debt, that for sure has a higher interest rate.

In both of these payment options, it will require that you don’t deviate in using your approach. It is a good idea to make your payments at the same time every month so that it becomes a regular routine. The more you use this approach it gets easier for you to do so.

In using either one of these debt reduction plans, you can’t make new bills as it will take away from your effort to stay on track. You may get people who want you to buy them something on credit and they will give you the cash. If this situation comes up don’t do it as they may start paying you one month and forget to do later.  In others words, you can;t let others deter you from staying on course in using your plan, as cutting into your debt is for your benefit, and not for them. After you reach your target of reducing your bills, and you will feel good because that is how I felt.

In the last point, you can expedite cleaning up your debt if you are able to come up with a lump sum part of your debt,  you can decide to try this approach with your creditor.

For example, if you can come up with a lump sum amount that equals to 50 to 60%  of what you owe, the creditor may accept this arrangement to close out your debt. In using this method, it will help you right away but you must also be aware that it will put a blemish mark on your credit scores. If that isn’t a big issue for you, and you are able to get that lump sum by some means,  I strongly suggest that you try to work with your creditor to close out this debt.  But if you elect to go in this direction, make sure that your creditor gives you a letter ” stating account settled “, so that other creditors don’t come after you later on.

In closing, you may think that you can’t get out of this mess, and I’m telling that you shouldn’t look at this in a negative way.  Hopefully, the examples noted in this article will give you a clue of what is the best method for you. When I was younger, I used the first example to get out of my problems. When I became older, and my bills were larger, so I used the second example to clear up my debt. In the end, it’s all about you telling yourselves that I’m going to do this and stick with it. I did so and so can you, but it’s going to take your ” very best ” to do this, and I’m pulling for you, good luck.