The End of Debt
Posted by Save Money Frugal TipsToday’s post is personal. I’m so overjoyed that I can’t NOT share the good news.
In just two short weeks, I will be completely FREE of debt! I paid off nearly $40,000 worth of debt in the past 10 years.
The bulk of my debt – all of it left over from my disastrous marriage – was medical bills. They were paid off early. In retrospect, I should have focused on paying off the credit cards my ex-husband opened in both our names first. A lesson learned about interest!
The best way to pay off debt:
- Pay off things that are current (that way, they won’t negatively affect your credit score)
- Pay off the highest interest debt first (put as much as you can on that bill every month)
- Snowball the payment from the first into the second highest interest debt next
- Continue till you are debt free!
Another good tip is to negotiate with creditors or debt collection agencies. Some of them can be downright horrible. Simply send them a letter stating clearly that you will not accept any more contact by telephone and that you want all correspondence in writing. By law, they need to abide by that. It makes answering the phone much less stressful.
After that, come up with a payment plan you can actually afford. Mail the collection agency or creditor a letter stating you intend to pay X amount every month until the debt is satisfied AND send the first payment.
Do not be afraid to renegotiate your debt. There are tons of “debt repair” companies ready to take your money to do this for you, but it is not that hard to do it yourself. You can also do it in writing, or call the collection agency yourself. If the debt is outstanding for long enough, the collection agency will be more than willing to negotiate a settlement amount.
I did this on my last credit card bill. I figure I still ended up paying quite a bit more than the money that was actually spent, but I paid a lot less than I would have if I did not negotiate a lower payment. Just one more payment… and I’m free! Yay!
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