What Do I Do if My Debt Payments Are Higher Than My Income?

January 21, 2009 · Filed Under Budgeting · Comments Off on What Do I Do if My Debt Payments Are Higher Than My Income? 

By Cindy Morus, Creator of the Pay Debt Quickly System

Question: I don’t know how to pay off my debt. My debts are more than the money I earn each month. What can I do?

Answer: That’s a tough spot to be in. Let’s look at the scenario that your debts are higher than your income but you’re still able to make the payments. It sounds like this is really worrying you – maybe that you won’t be able to make the payments soon. So, now is a good time to be asking this question. Since you can make the payments, every month, you’re actually in a good position to be able to eliminate the debt over the next couple of years (perhaps sooner). Here’s what to do…

1. From Minimum Payments to Fixed Payments. Convert all your current minimum payments to fixed payments. That means that if you are paying $55.55 this month, you’ll pay that every single month until the debt is paid off – no matter what the minimum payment is on your bill.
2. Stop Using Your Credit Cards. There’s no grace period on cards that have a balance so you start paying interest on new charges immediately.
3. Get Clear on Your Debt. List every one of your debts on a piece of paper (you can get my form here) so you know exactly what you’re dealing with. Sometimes it’s worse than you thought and sometimes not so bad but you won’t be able to really know until you see it all in black and white.

Get More Help:

Eliminate your debt and save your money using the Pay Debt Quickly System. It comes with the software and strategies you need get rid of your debt without making an large payments or making any significant lifestyle changes. Click here to learn more and get started right away.

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