Four Ways To Get Out Of Debt

Naturally, this topic has been on my mind a lot recently. Our debt really wasn't an issue while TB was working. We were paying all our bills and had some money left over to save! Now we are so far under we can't even qualify for consumer credit counseling, which will go over like a big lead balloon with the mortgage company.

The mortgage company pulled a copy of our credit report. Now, it's not enough to just catch up with the payments. They want us to prove we can afford all our bills and still have money left over. If TB can't make the salary he was making, we're sort of doomed.

I contacted one of those "buy-your-house-quick" places and there is some guy coming out to talk to us this week. I did it impulsively because I'd become so weighted down with the burden of all this. TB wants to sell the house for more than it's appraised; to do that, I think we'd have to put it on the market.

I've also been surfing houses for sale in Pittsburgh and Delaware. What two entirely different locations! Well, but I have friends there and the costs of living are less. In Delaware, I'd be closer to more friends and family and the beach; in Pittsburgh, I would have one of my closest friends and much more house for the dollar.

Kristin would freak if she knew I was doing this. I do it because it helps me cope. I can't explain how it helps, just that it does.

In my Arca Max newsletter, I got this article which I found interesting and helpful:

4 Rules To Get Out of Debt
Mary Hunt
If you're in debt, you have to get out. But remember, a plan is only as good as your ability to stick with it. Just like diets, all of them work. But which diet will you stick with? No matter how effective the plan is in theory, if the regimen is outlandish and impractical, you will not stick with it.

When evaluating a get-out-of-debt plan, you should look for one with these characteristics:

-- It is easy to prepare.

-- It is simple to understand.

-- It can be reduced to writing.

-- Its results can be measured.

-- It has a specific finish date.

I have developed the Rapid Debt-Repayment Plan, which fits these criteria and consists of four rules. If you diligently apply these rules to your unsecured debts, you will get out of debt in record time.

Rule No. 1: No more new unsecured debt. If you don't stop adding to the problem, you'll be like the homeowner with the kitchen fire, except instead of putting out the blaze that's ready to destroy the entire structure, you'll be pouring gasoline on it.

Rule No. 2: Pay the same amount every month. Whatever your minimum monthly payment is this month, fix it. That means even if your creditor will accept less next month, you'll pay the same amount you paid this month for each of your debts until you are out of debt.

Rule No. 3: Line up your debts according to size, putting the one with the shortest payoff time at the top and the one with the longest term at the bottom.

Rule No. 4: As one debt is paid, take its payment and add it to the payment of the next debt in line. With much larger payments going to that second debt each month, it will reach $0 in record time. Then take both the first and second payments and add them to the third debt's payment until it is paid, continuing until all are paid.

You might be wondering, "Wouldn't it be better to line up my debts according to interest rate, with the highest in the first position, rather than the debt that will be paid off most quickly?"

Theoretically, that might be the way to go. Some financial experts advise that, in fact. But I have worked these plans every which way possible and still believe that the potential difference in interest is very minor compared to the benefits of using a plan that has a high probability of success. The RDRP is a plan you will stick with because it has big emotional payoffs along the way.

So, isn't it about time for you to get out of debt? I did, thousands of others have, and even more are on their way. You can do it, too. And you can count on me to be right here cheering you on all the way!

If you want to see how this plan works, go to DebtProofLiving.com and click on RDRP Calculator Demo. You're going to be amazed.

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Mary Hunt is the founder of DebtProofLiving.com and author of 17 books, including "Debt-Proof Living." You can e-mail her at mary@everydaycheapskate.com, or write to Everyday Cheapskate, P.O. Box 2135, Paramount, CA 90723. To find out more about Mary Hunt and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.