Many people end up asking themselves “How do I lower my debt?” especially with the financial turmoil currently turning our world upside down. We have become so used to living beyond our means that a huge bump on the marketing world could kick millionaires and well-off families unto the streets with only the clothes on their back.



If you find yourself slipping closer and closer to this kind of situation, here are a few tips to help you lower debt and ride through the mess that we are going through right now.

So how do I lower my debt?

Pay the bills

I can handle the debt myself by making small payments over time. Okay, so it does not take degrees in investment management and business administration to get the logic behind this tip, but it is the simplest and most effective method of lowering debt. Scrimp and save every penny you can by eliminating unnecessary expenses, and you should have enough money to help tide you over your debt problem. If you have the guts to tighten your belt in this time of need, then you will most likely get over your debt problem.

Seek credit counseling

Professionals can tell me how to lessen my debt. The next best thing to doing things yourself is asking someone for help. Credit counseling can come in many forms and can be available through public and private means. That means the government and organizations can help you see where you go wrong and give you advice on how to fix it. This article is a form of credit counseling, though quite broad in nature. Real face-to-face counseling helps you with your own specific situation, which is always a better thing in the end.

Negotiate for lower rates

I can talk with my lender to help lower my debt. This is a very plausible factor in today's turbulent times, when banks and lenders would rather negotiate a debt than lose money on foreclosure and bankruptcy. You can approach the lender yourself or seek assistance from debt management institutions, if you need a guiding hand in the process.

Consolidate debt

I can take out a loan to finance all my other loans. What you are basically doing is mixing up all your messy loans into one big loan, negotiating for newer, lighter terms. Very useful for those with credit card and other high-interest problems, but very messy legal and technical-wise. Debt consolidation requires a lot of planning, preparation and negotiation, and is something you cannot do on a regular basis.

Declare bankruptcy

I give up the fight and declare bankruptcy to lower my debt close to zero. Not what you want to go through, but is inevitable if you simply cannot finance your debts with your current income. Chapter 7 bankruptcies free you from a substantial amount of debt, while chapter 13 bankruptcies allow you to pay your debts with modified rates. If you ever have to declare bankruptcy, try to opt for the latter chapter to avoid completely losing everything and totally busting your credit rating.