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Debt affects millions of people today. Bankruptcy’s are on the rise and more and more people are struggling to stay afloat.

For those that don’t manage to avoid bankruptcy, the effects can stay with them for many years. The stigma that was once attached to it has lessened but it can and does still cause many difficulties for its victims. For example, It can cause you trouble when you apply for a job because employers can now credit check you.

Many people who have become trapped with large debts will find that bankruptcy is their only option and if that is the case, you should face it head on. For most though, options may still exist. If this is the case for you, it is important that you take action as soon as possible.

47% of credit card holders only pay off the minimum balance on their card each month. This is the worst way to pay them off, guaranteeing that you will still be in debt for many years to come.

It seems to be almost the norm in our culture to think that we are owed something and that we should be able to get the things that we want as soon as we want it. The banks and credit card companies have spent allot of money trying to convince us of this. That way, they can keep us owing them money and working for them forever!

All is not lost though, for most people, if you take action now, you can probably still fix the problem and start living a debt free life!

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. Work out which debts to focus on. One good strategy is to only pay the minimum payments on all of your debts except one which you deem to be the most pressing. (Normally the one with the highest interest but it could also be pressing for other reasons.) You pay as much as you can to that one until it is paid off then you add the payments for that one to the next most pressing debt. This can significantly shorten the amount of time it takes to get out of debt.

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. Take the time to examine your Credit report. You can get a copy of your credit report from a number of sources online now. Most of these services will also send you alerts when it is updated. This can help you stay on top of identity theft. The most important reason to check it out though is to make sure that you have no black marks on it.

Tip 5. Write down and stick to a budget. When you stick to a budget, it fills you with confidence that you can make a positive change and break free of your debt trouble. It also makes it much more likely that you will because you know that you are working everyday towards improving your situation.

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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