It doesn’t take much time or energy to rack up debilitating debt.  As a matter of fact it can happen in the blink of an eye or so it seems.  You might start out with one credit card that you use for only a few purchases.  The next thing you know your credit card is maxed out and you are struggling to make the minimum payment each month.  Credit card debt can single handedly make it impossible for you to reach your financial goals by reducing or even eliminating the funds required to invest and save for your future.  What can you do to get out from under a mountain of debt?  Before you consider your options consider the following questions to determine what plan will work for you.

How did you get here?

This is a very important part of your journey to living a debt free life.  No one wants to take the steps to become debt free only to find themselves back in the same situation in the future.  Are you in debt due to large purchases or expenses such as buying a new home, a new car or financing a college education?  Perhaps your debt snowball began due to an accident- your car broke down or you needed a new furnace.  Loss of employment or a medical accident can devastate a household budget leaving huge bills in the wake.  Take a moment to look at your finances and understand what catapulted you into this monthly struggle to pay your bills.  If you don’t see your answer mentioned, it is likely you are dealing with debt incurred due to mismanagement of finances or simply living beyond your means.

Are you ready to get out of debt?

Of course you are ready to get out debt.  No one would choose to remain in debt….right?  In reality the answer is yes; ultimately it is your choice if you will continue to struggle to pay your bills or if you are willing to take the steps needed to get out of your current situation.  Getting out of debt is not easy.  It requires sacrifice, discipline and in some cases a willingness to change your entire lifestyle to succeed.  Your ability to focus on your end goal is paramount to your success.

How does the amount of debt affect your options?

Each person’s personal finance situation is just that-personal. Determining the best method to get out of debt requires a close examination of your current debt level as well as your ability to pay down your debt.  If you are current on all your accounts and have money remaining after you have made your payments you can consider the snowball method applying any excess monies toward debt in a strategic manner to reduce your account balances.  If you are barely making your minimum payments and have already cut costs as much as possible finding “extra” money to apply toward debt reduction may be difficult.  You might be in a position to consider debt consolidation or negotiating with your creditors for reduced interest rates to ensure more of your money goes toward your principal balance.  Finally if you are have accounts that are past due or in collection and you have no way of making up the payments it might be time to consider debt settlement or even bankruptcy.

By having a better understanding of how you got in your current situation, determining if you are ready to get out of debt and knowing how your debt level affects your options you will be better equipped to make the decisions required for a successful debt relief strategy.