In less than 50 years, debt has become such a norm that conversations about how to get out of debt can be heard all around us every day.There are many thousands of people just like you who want to change their life and get out of debt. By taking this massive step, you’re guaranteeing yourself a stress-free, financially secure future and here are 7 tips to help you on your way.

Get real!

The first step to get out of debt is to admit how much money you owe. Until you see that total debt figure written down, you can kid yourself you don’t owe a lot really, especially if you have many smaller amounts of debts spread around different cards, loans and overdrafts. You end up not trying to get out of debt because you’ve been lulled into a false sense of security.

Plan ahead

Half the battle when trying to get out of debt is paying your creditors. The other half is anticipating future big expenses and having enough money in your bank account to cover them. Christmas comes once a year at the same time so start putting away some money every month from now on. By doing this with all your bigger expenses, you can even them out across the year so you have less emergencies and feel in control of your finances while you get out of debt.

Have an emergency savings account

Its always good to have some spare cash to hand, just in case something unexpected happened, like your boiler broke down or a you had a water leak. What would you do if you had no spare cash? The repairman probably won’t offer credit! Some people like to keep a credit card handy for unexpected emergencies, which is all good and well, but at the end of the day it’s the banks money and not yours! So make sure you start up a separate savings account for those ‘just in case’ moments.

Start paying cash for everything

Our lives have been made easier and simpler with the introduction of credit cards, but it has also made sure we get into debt faster too! If you want to get out of debt it is important to get a grip on your spending. Start by working out how much you need each week to live on and then ONLY withdrawal that amount each week. When you know your spending your own money and not the banks it makes it that little bit harder to part with, because you know when its gone, its gone!

Wean yourself off the credit

One of the hardest things to do when trying to get out of debt is to stop using credit, particularly credit cards. Some people ‘go cold turkey’, cutting up credit cards and store cards, others prefer to keep a credit card active to have a little security for unexpected bills. If you decide to keep one line of credit open for this reason, promise yourself it will only ever be used for major emergencies and not because you might want to go shopping to cheer yourself up after a bad day at work.

Make sure you and your partner support each other

Just because you’re fired up with enthusiasm about trying to get out of debt doesn’t mean your other half may be. In fact, if your other half has been responsible for building up part of the debt, they may not be willing to stop spending and could sabotage your efforts to get out of debt.

Don’t hold back when finding alternatives Be creative!

Half of the battle when trying to get out of debt is to come up with low cost alternatives to everyday items you are used to slapping down money for. For example, make your own cappuccinos instead of visiting Starbucks, use the library instead of buying new books, read newspapers for free online instead of buying them, and cook for friends instead of going out to dinner. Try and come up with as many ways of having the things you enjoy at lower cost.

Its important to celebrate milestones

Each time you reach a milestone along your ‘get out of debt’ journey, celebrate and reward yourself to keep you motivated and your enthusiasm high. Each reward should fit within your budget and be appropriate to the milestone achieved on your ‘get out of debt’ journey, but should also be worthwhile and something that you would really like. Examples of motivators might be dining out a good restaurant, going to the cinema, a city break, a couple of DVDs and a bottle of nice wine, or maybe even a course at the local college. Choose rewards that will make you happy.

There are many ways and methods to get out of debt but its important to find the right solution that suits you. Once you find it stick to your plan and you will become debt free in now time.

Working out how to pay off your debts is no easy task and most of the time you end up having to do it without the benefit of specialist knowledge. Like the majority of people with debts, you end up muddling through, sometimes making things better, and sometimes making them worse. So when you first do your research on all the different ways to pay back debt and come across debt settlement, it sounds so simple you get excited. Your creditors agree to your debt settlement proposal and you can look forward to getting up to 80% of your debt written off and walking away.

In reality however completing the debt settlement process is far from simple, especially when dealing with creditors who are intent on getting you to pay 100% of the debt by any means possible. And if it is the first time you’ve ever negotiated a debt settlement, you play right into their hands. Creditors like nothing better than an inexperienced person to negotiate with because you will have little idea about the lengths they will go to preventing you from getting a debt settlement, such as:

Cashing your cheque and then asking for more

When you spoke to your creditor on the phone, they said they were happy with the debt settlement you were proposing and asked you to send a letter about the offer with a cheque. You send the cheque off with a letter and wait for their confirmation that your debt is paid off. Instead, you get a letter thanking you for the payment and requesting a date when the rest will be paid.

Deadlines which cannot be met

You have 14 days to accept a debt settlement offer from your lender. Trouble is, the letter is dated 12 days ago and the postmark shows your creditor didn’t put it in the post until the day before. You have only two days to get it back to them and because you’ve been at work all day you’ve already missed the post for the day. You get your acceptance posted off the next day, you’re your creditor ‘claims’ it didn’t arrive in time so they assumed it was unacceptable to you. They demand 100% of their money back. You have to start all over again.

Misinterpreting terms and conditions

You write what you think is a clear letter to your creditor offering your debt settlement proposal. However, you didn’t realise one of your comments could be misinterpreted and provide a loophole for your creditor to wriggle out of and claim you broke the agreement. For example, you initiate a BACS transfer on a payment date agreed between you and your creditor. Your creditor then claims you broke the terms of your agreement as the funds were not cleared on the date agreed. They then thank you for your payment and then demand the remaining balance.

Tying you up in knots on the phone

You offer a debt settlement to your creditor and they ask you to ring them to sort out the details. Suddenly you are faced with a rude aggressive member of staff who claims you lied on your original credit application form and threatens to take you to court for fraud. Frightened and believing you filled in the form incorrectly by accident, you agree to what they want. Only when you get off the phone and look through for your copy of your credit agreement do you realise you’ve been conned – it isn’t filled in incorrectly at all. They lied to get you to agree to their demands.

Hassling your friends and family

Thanks to the generosity of 73 year old Great Aunt Nelly you’re finally able to offer a debt settlement to your creditors. Your creditor is delighted and during your chat they sweetly ask for Great Aunt Nelly’s contact details to arrange the debt settlement payment with her. Suddenly Great Aunt Nelly starts getting nasty phone calls requesting she pay for the full 100% of the debt. She rings you in tears claiming the last call was so bad it gave her palpitations and she’s going to scrape her life savings together to pay off the whole debt and get rid of them.

DIY debt settlement is for you only if you have a strong stomach, understand the tactics creditors can use, and have good negotiating skills to avoid falling prey to them. Creditors want one thing and one thing only; to get the full amount of the debt from you by any means possible. If they have to use nasty underhand tactics to do so they will.

Finding the right debt settlement company is vial as you want to get as much debt written off as possible. Use our free debt settlement calculator here and find the right company to help you or visit our debt settlement faq for more advice.