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The Method: Save up $1,000. This is to be used as an emergency fund. Now don’t touch that fund and start paying off your debts. Attempt to pay off ALL your debt, without settling. This is to keep your credit score high and ensure you abide by your agreements.

The next step is then to order your debts from smallest to largest, and start paying off your smallest debt first. One the smallest one is paid off, you move on to the next one

The Pros: The pros of this approach compared to other debt solutions is that it often has a nice motivating quality. Seeing yourself succeed at paying off a little debt might give you the boost you need to pay off the rest of your debts.

The Cons: This approach is not mathematically sound. For one, it makes more sense to pay off the debt that has the highest interest rate first. Also, it often makes more sense to attempt to settle a debt with your creditor in today’s economic landscape then get stuck paying the entire amount. This is especially true if your debts were incurred before the housing collapse in 2008 and the ensuing recession.

The Debt Avalanche: The Debt avalanche is kind of the reverse of the debt snowball. Rather than paying the lowest debt first, you pay off the highest one first. If this is the one with the highest interest. If not, you do the highest interest debt first.

The Pros: This makes mathematical sense since it keeps your total interest as low as possible.

The Cons: Again, depending on how much debt you have incurred, you may be better off settling your debt than going after it with minimum payments. After all, if you’re reading this article and seeking debt solutions, it’s likely you just can’t pay off your debts quickly…no matter how hard you try.

The most important thing, whichever route you go. Is to take control of your financial freedom and make sure you look for yourself and your family.

If you have even glanced at our blog, you know we spend a lot of time discussing the landscape of debt settlement POST the new laws. And for those of you just tuning in, those laws limited debt solutions to only companies that charge fees per PERFORMANCE. Nothing upfront.

Now most of the companies who relied on ridiculous upfront fees are thankfully out of business. But there remain a few loop-holes…..or as I like to call them “L” holes.

These L holes are companies that don’t try to improve themselves to meet the new law’s requirements. Instead they just find increasingly more sophisticated ways to scam people and not get caught.

The purpose of this is clear: Don’t provide debt solutions, and scam people for every dollar they have.

One of the big loopholes these companies utilize is a front-loaded scam called “face to face.” This allows them to still charge people upfront so long as they meet them face-to-face. Terrible.

There is no reason for a company to meet you face to face and ask for upfront fees. If they want to meet face to face, it should be for the right reasons: To just MEET you. Why is that such a foreign concept?

Don’t fall for the idea that meeting face to face is more convenient. It might be…it might not be. Just keep a critical mind around the notion of paying fees upfront, and protect yourself.

Don’t be afraid to call them on it. What kind of debt solutions are these? We are broke and you are just charging us more? Keep the vultures at bay, trust me, if they are not transparent- they are not looking to help.

And if you do decide to do business with an “L” hole make sure they do it over the phone and with no upfront fees.

They are insidious…they are mean….they are debt collectors. This business attracts only some of the most persistent and intrusive individuals in this country. The kind of people you don’t want to deal with. Now they exploit the social marketing phenomenon for their own interest. Facebook is fair game when it comes to debt collectors stalking you and trying to reclaim their debts.

In Spain, it is a common phenomenon to have debt collectors follow people around in weird outfits, constantly harassing them in ways that are very embarrassing. Since communities are tight-knit there, it turns into a public scandal and often makes people pay up.

Here we mostly live in commuter communities, where it would not make sense to wait around for someone while they walked from the house to their car. however, stalking on Facebook parallels the Spanish model in the sense that it can often significantly shame a person who is in debt.

The first lawsuit ever has popped up that targets a debt collector for harassing her, her friends, and even family on Facebook. literally everyone this woman ever knew got a message from this guy, and the messages were not too pretty. Thanks to these tools, debt collectors do not have to track you down. They simply follow you online and start sending messages to anyone they want. Not the type of thing you want on your wall. People started messaging her, saying she should pay up. The debt collector even started a group called “Betty, pay your bills already,” which got a bunch of likes and some comments (from an ex-boyfriend of hers.

Of course Betty is not her real name, but one thing we can state about her is that her reputation was integral for her business. Once all her colleagues and business associates learned about this problem, she had a harder time networking and closing deals. It really impacted her ability to make money given that she was in a direct sales position.

There are a few things you can do in this position: One is ensure your privacy settings don’t let someone like this get through the door.

The other of course is to stay out of debt.

And as always, if you need help, feel free to contact us.

This is a perennial question in life as it is in debt. I suppose if you have some rich Uncle about to kick the bucket, and devote his entire estate to you…You can be as in debt as you want to.

#1 DON’T do monthly minimums anymore. Minimum payments are, by nature, designed to keep you in debt for the rest of your life. Instead, you should focus on hitting the debts that have the highest interest rates. You need to pay more than minimums to get out of these killer interest rates.

#2 Consolidation: This piggy backs off the notion of transferring to lower interest rate cards. But it also means consolidating into one lower monthly payment. You will get hit by transfer fees but this might be the best solution to keep in mind. You can also take out new loans potentially, that just have better rates. Then use these to pay off loans that have worse rates.

#3. Make more money. Easier said than done right? In reality, most Americans are underemployed, meaning they could be making more money under different circumstances. This might mean relocating to a higher paying job, working harder, or investing in continuing education and training. Also there are side jobs, second jobs,and investment opportunities. All of these can be great ways to increase your income.

It is important however not to spend your new earnings but focus on paying off your debt. Many people who get a boost of financial resources assume they should be living better, so they start getting further and further into debt. This is a common pattern and should be avoided at all costs.

#4 There’s a time to save and a time to spend. Your goals should include provisions for both of those times. Keep track of your target projections of savings and spendings, and do not go over this projection. The limits will keep you on track longer after you pull out of debt.

#5 More is less. If you savings on low rates in a checking acct. use them towards debt first.

#6 Stick to debt payment. Whatever you decide, stick to it. If you enter in a debt payment program, stick to that. The main thing is to be patient and reap rewards in the long term.

This article is not about canned advice on how to get out of debt. It is not about listing the hundred “common sense” techniques that you thought of on your own. What we would like to do within this post is explain a few debt solution strategies you may not have thought of yet. Let us know what you think.

#1: Online budgeting tools. You know they’re out there but you have been putting it off. Sites like www.mint.com allow complete analytic data about your budget, at absolutely no cost. Another strong tool is YNAB, you need a budget. This tool automatically generates a strategy in addition to offering analytics data.

#2 Cash is now your best friend. Credit cards are probably what got you into this mess. And they won’t help you get out. Pretend like you’re in the mob and start carrying wads of cash wherever you go. The reason is simple: Money means something. Plastic doesn’t. You will be less likely to part with your hard-earned cash if it is sitting in your pocket. And if safety is an issue, simply carry smaller denominations.

#3 Frugality through different eyes. Being frugal does not just mean cutting back. It means truly evaluating wants and needs in life. Go through all your monthly expenses and ask what would happen if you cut that out. Would the consequences be SO terrible? Could you tolerate living in a smaller space? Driving an older car?

#4: Don’t try but do. Develop a plan in advance. Take time to make it as effective and realistic as possible. Then never diverge from that plan. The plan is your saving grace. If there is every a chance to deviate from it, do not take it.

#5: Use balance transfer credit cards if you HAVE TO use credit cards: If you must use a card, consider going balance transfer. Switching the balance from a high interest rate card to a lower one will help you save money. Balance transfers do cost money but if you do it fast enough, with enough cards, you may be able to save yourself money.

#6: Savings. Once you start paying your debt off, use a similar technique to ensure savings. Once your money begins sitting in a savings account it will work for you, rather than end up in the hands of credit card companies.