Getting out of debt can feel overwhelming, especially when you have multiple credit cards, loans, high interest rates, or monthly payments that leave little money for everything else.
The good news is that you don’t need to solve your entire debt problem in one day.
The first step is to understand exactly what you owe. Then you can create a realistic budget, choose a debt payoff strategy, reduce unnecessary expenses, and look for ways to lower your interest costs or increase the amount you can put toward debt.
This guide explains how to get out of debt with a practical step-by-step approach. You’ll learn how to create a debt payoff plan, compare the debt snowball and debt avalanche methods, understand debt consolidation and debt management, negotiate with creditors, and deal with debt collectors.
Whether you’re trying to pay off debt fast, dealing with credit card balances, or wondering how to get out of debt with a low income, the goal is the same: create a plan you can realistically follow.
Important: There is no single debt payoff strategy that works for everyone. Your best approach depends on your income, expenses, interest rates, debt types, account status, and financial circumstances.
How to Get Out of Debt: Start With These 7 Steps
A simple debt payoff roadmap looks like this:
- Find out exactly how much you owe.
- Create a realistic budget.
- Stop adding unnecessary new debt.
- Keep up with required minimum payments where possible.
- Choose a debt payoff strategy.
- Look for ways to reduce interest or increase your payments.
- Track your progress and adjust your plan.
The Federal Trade Commission also recommends starting with a budget and contacting creditors if you’re having trouble making payments rather than waiting for the situation to become worse.
1. List All of Your Debts
Before you can decide how to pay off debt, you need to know exactly what you’re dealing with.
Make a list of every debt you currently owe.
Include:
- Creditor or lender
- Type of debt
- Current balance
- Interest rate or APR
- Minimum monthly payment
- Due date
- Account status
Example
| Debt | Balance | Interest Rate | Minimum Payment |
|---|---|---|---|
| Credit Card | $4,500 | 22% | $150 |
| Personal Loan | $7,000 | 10% | $220 |
| Medical Bill | $1,200 | 0% | $100 |
Now you have a starting point.
Don’t avoid looking at the numbers because they feel uncomfortable. Knowing your total balance gives you something you can actually work with.
2. Stop Adding New Debt
It’s difficult to become debt-free if you’re continuously adding new balances.
Look at the reasons you’re using credit.
Are you using credit cards for:
- Groceries?
- Emergency expenses?
- Shopping?
- Subscriptions?
- Dining out?
- Bills?
- Covering a budget shortfall?
If your debt is increasing every month, first identify why.
You may need to:
- Reduce discretionary spending
- Cancel unused subscriptions
- Delay nonessential purchases
- Build a small emergency buffer
- Use cash or a debit account for planned expenses
- Review recurring bills
- Find ways to increase income
The goal isn’t to eliminate every enjoyable expense. It’s to create enough breathing room that your debt balance can consistently move downward.
Step 3: Create a Realistic Budget
A budget is simply a plan for your money.
It helps you understand:
- How much you earn
- Where your money goes
- How much can you put toward debt each month
A Simple Budget Example
Monthly Income: $3,500
Expenses:
- Rent: $1,100
- Utilities: $250
- Groceries: $400
- Transportation: $250
- Insurance: $200
- Entertainment: $150
- Savings: $200
Remaining money:
$950
Instead of wondering where that money disappears, you can decide to use part of it for extra debt payments.
Step 4: Choose a Debt Repayment Strategy
Once you know your budget, choose a repayment method that keeps you motivated.
Pay off the smallest debt first while making minimum payments on the others.
Once the smallest debt is gone, roll that payment into the next debt.
Example
- Credit Card A: $500
- Medical Bill: $1,200
- Personal Loan: $6,000
Pay off the $500 first.
The quick win can boost your motivation and help you get out of debt.
The Debt Avalanche Method
Instead of focusing on the smallest balance, focus on the debt with the highest interest rate.
This method can save more money over time because you reduce interest costs.
Example
If your credit card has a 24% interest rate and your loan has an 8% rate, pay extra toward the credit card first.
Step 5: Find Ways to Pay Off Debt Faster
If you want to know how to get out of debt fast, don’t focus only on cutting expenses.
Look at both sides of your budget:
Reduce expenses
You might:
- Cancel unused subscriptions
- Shop around for insurance
- Reduce discretionary spending
- Cook more meals at home
- Review recurring bills
- Avoid unnecessary purchases
Increase income.
You might:
- Take temporary extra work
- Freelance
- Sell unused items
- Work additional hours
- Use a skill to generate side income
- Put bonuses or windfalls toward debt
Even an additional $100–$200 per month can make a meaningful difference over time.
The key is to direct additional money toward your debt instead of allowing lifestyle expenses to increase at the same time.
Step 6: Try to Reduce Your Interest Rate
High interest can make it difficult to reduce your balance even when you’re making regular payments.
If you have credit card debt, contact the issuer and ask whether it offers:
- A lower APR
- A hardship program
- A temporary payment reduction
- A fee waiver
- A repayment plan
The FTC specifically recommends contacting creditors and trying to work out a payment plan with lower payments you can manage.
Example
You could say:
“I’m working to pay down my balance, but the current interest rate is making repayment difficult. Are there any lower-rate or hardship options available for my account?”
You don’t need to hire a company to make this request for you. You can contact your creditor directly.
Related guide:
How to Negotiate With Creditors: Step-by-Step Guide + Scripts
Step 7: Consider Debt Consolidation
Debt consolidation means combining multiple debts into another financial product or repayment arrangement.
For example, you might use a consolidation loan to pay several credit card balances and then make one payment on the new loan.
Potential advantages include:
- One payment instead of several
- Simplified debt management
- Potentially lower interest
- A defined repayment schedule
But consolidation isn’t automatically cheaper.
Before using a consolidation loan, compare:
- APR
- Fees
- Loan term
- Monthly payment
- Total repayment amount
- Whether the interest rate is fixed or variable
Also consider why the debt accumulated in the first place. If you consolidate your credit cards and then continue using them heavily, you could end up with new debt alongside the consolidation loan.
How to Get Out of Debt With a Low Income
If you’re wondering how to get out of debt with a low income, don’t assume you need a huge extra payment to make progress.
Start with the basics.
Step 1: Protect essential expenses.
Prioritize necessities such as
- Housing
- Food
- Utilities
- Transportation
- Insurance
- Essential medical costs
Step 2: Know your minimum debt obligations.
Understand which payments are required and when they’re due.
Step 3: Find a small amount for extra repayment.
Even $25, $50, or $100 of additional monthly repayment can help if you can maintain it.
Step 4: Look for ways to increase income.
Temporary additional income can sometimes make a bigger difference than trying to cut every expense.
Step 5: Contact creditors.
If your current payments aren’t affordable, ask about hardship or repayment options.
Step 6: Consider nonprofit credit counseling.
If you’re struggling to manage everything yourself, a legitimate nonprofit credit counselor may help you review your options.
Create a 90-Day Debt Payoff Plan
Instead of thinking:
“I need to become debt-free.”
Focus on the next 90 days.
Days 1–7: Understand Your Situation
- List every debt
- Calculate your total balance
- Record APRs
- Record minimum payments
- Review your income
- Review your expenses
- Identify unnecessary spending
Days 8–30: Build Your Plan
- Choose snowball or avalanche
- Set your monthly debt-payment target
- Contact creditors if necessary
- Cancel unnecessary expenses
- Set up automatic minimum payments where appropriate
- Identify opportunities for additional income
Days 31–60: Increase Your Progress
- Make your planned extra payments
- Track your target debt
- Look for opportunities to reduce interest
- Put unexpected income toward your target when appropriate
- Avoid adding new unnecessary debt
Days 61–90: Review and Adjust
Calculate:
Starting debt − current debt = progress
Then ask:
- Did my balance decrease?
- Did I stay within my budget?
- Can I increase my payment?
- Did I reduce any interest costs?
- What worked?
- What needs to change?
Then begin your next 90-day cycle.
What If You’re Feeling Overwhelmed?
If your debt feels unmanageable, know that you’re not alone.
You may benefit from speaking with a qualified financial counselor or nonprofit credit counseling organization to better understand your options.
Seeking help is a practical step—not a sign of failure.
Is the debt snowball or the debt avalanche method better?
Both methods are effective.
- Choose the Debt Snowball if small wins help keep you motivated.
- Choose the Debt Avalanche if you want to minimize interest costs over time.
The best strategy is the one you’ll stick with.
How Can I Get Out of Debt with No Money?
When you have no spare cash, getting out of debt isn’t about making massive payments right away—it’s about stop-gaps, restructuring what you owe, and protecting your income.
Here are the most effective moves you can make right now:
-
Audit and Freeze: Track every single penny for two weeks. Identify absolute bare-minimum survival needs (housing, utilities, basic food). Put a hard freeze on all non-essential spending.
-
Call Your Creditors Directly: Call them before you miss a payment. Ask for their hardship program. Creditors will often temporarily lower your interest rates, waive fees, or pause payments for a few months if you show genuine hardship.
-
Target the Minimums: If you have multiple debts, pay only the absolute minimum required on all of them to keep your account current and protect your credit score. If you have even $5 extra, throw it at the smallest balance to clear it completely (the Snowball Method) for a quick psychological win.
-
Explore Free Debt Counseling: Look for non-profit credit counseling agencies (like the National Foundation for Credit Counseling in the US). They offer free initial consultations and can help set up a Debt Management Plan (DMP) to lower your interest rates, though this may require a small monthly fee later if you enroll.
-
Look into Legal Protections: If your debt is completely overwhelming compared to your income and you see no way out in the next few years, look into bankruptcy. A Chapter 7 bankruptcy can wipe out unsecured debts (like credit cards and medical bills) to give you a clean slate.
A quick warning: Beware of “debt settlement” companies that promise to wipe out your debt for pennies on the dollar if you pay them a fee upfront. Many are predatory. Stick to certified non-profit counselors.
Final Thoughts—Best Advice to Get Out of Debt
Getting out of debt doesn’t happen overnight, but every payment moves you one step closer to financial freedom.
You don’t need to be perfect—you just need to be consistent.
Start by understanding your debt, creating a realistic budget, choosing a repayment strategy that fits your goals, and avoiding new debt whenever possible. Celebrate each milestone, learn from setbacks, and keep moving forward.
Remember, becoming debt-free isn’t just about paying off balances. It’s about building healthier financial habits that support your future. Every informed decision you make today brings you closer to greater confidence, stability, and peace of mind.
Next Step: Pick one action from this guide today—list your debts, create a simple budget, or make an extra payment. Small steps taken consistently can lead to meaningful financial progress over time.
Frequently Asked Questions
What is the fastest way to get out of debt?
There isn’t one fastest method for everyone. A practical approach is to stop adding unnecessary debt, maintain required payments, choose a payoff strategy, reduce interest where possible, and direct additional money toward your target debt.
How can I get out of debt fast?
To potentially get out of debt fast, increase the amount going toward debt while avoiding new borrowing. You can look for ways to reduce expenses, increase income, lower interest costs, and use a structured payoff strategy.
What is the best debt payoff strategy?
The best strategy depends on your priorities. The debt avalanche method focuses on the highest interest rate, while the debt snowball method focuses on the smallest balance. The avalanche can reduce interest costs, while the snowball can provide quicker psychological wins.
Should I use the debt snowball or debt avalanche?
Choose the avalanche if minimizing interest is your primary goal. Consider the snowball if paying off smaller balances quickly helps you stay motivated.
How can I pay off credit card debt?
Start by listing your balances, APRs, and minimum payments. Create a budget, stop unnecessary new charges, choose a payoff strategy, and consider contacting your card issuer about lower rates or hardship options.
Can I negotiate credit card debt?
You can contact your credit card company and ask about lower interest rates, hardship programs, payment arrangements, or other options. The creditor decides what it is willing to offer.
Can I negotiate with creditors before missing a payment?
You can contact a creditor before missing a payment if you anticipate difficulty. Communicating early may give you more options than waiting until the account becomes seriously delinquent.
How do I ask creditors to settle?
Explain your financial situation and ask whether a settlement option is available. If an offer is made, review the terms carefully and get the agreement in writing before making a payment.