How to Get Rid of Debt: Know Your Options

| 7 min read Financial Assistance

Paying off large chunks of debt can feel like trying to summit a snowy peak in sandals. The average American household is saddled with over $137,000 of debt, according to USA Today, making the journey to debt-free living especially daunting. It’s no surprise that many give up before covering any real ground.

Knowing how to get help with bills and how to get rid of debt can be overwhelming, but we’re here to offer you hope and help you attack your debt head-on. This article outlines different types of debt and the strategies you can use squash your bills once and for all.

The main types of debt you should know

From medical emergencies to car wrecks, life can toss plenty of unplanned expenses at us. Below are the most common types of debt.

Credit card debt

Too many people aren’t sure how to get help with credit card debt. Credit card debt can also be some of the toughest to pay down. When paying only the monthly minimum, high-interest rates often add years to payment plans. The average indebted household can speak to this, as their debt is over $15,000, according to NerdWallet.

Student loan debt

Discharging student loan debt is nearly impossible for most borrowers. Even after declaring bankruptcy, you are required to prove “undue hardship” to a judge in order to make your student loans disappear.

For more resources on student loans and paying for school, take a look at these related blog posts:

Medical debt

The truth about medical bankruptcy isn’t pretty. According to a report by the Kaiser Family Foundation, 63% of people with medical insurance said they used up most or all of their savings to pay for medical bills. A single accident or illness can leave people looking for financial help for out of pocket medical expenses for years afterward.

Are you ready to make a plan to conquer debt?

Every successful goal starts with a plan. Thankfully, there are multiple resources available that show you how to get help with debt and create a budget for the first time. If you’ve ever wondered exactly how to get rid of debt but didn’t know where to start, we have four initial steps to help you.

1. Determine how much debt you have

Compile all of your bills, jot down interest rates, and list everything in a spreadsheet. Knowing what you’re working with is half the battle.

2. Figure out what you should pay first

It makes sense to start paying the debt with the highest interest rate first. But if this will take you years to do, paying off a smaller debt much faster might give you the motivation to keep going. Try exploring a credit card calculator that will tell you how long it will take to pay off your credit cards, like this one from Time.

3. Lay out your budget and track spending

A good budget is everything when trying to pay down debt. Actually sticking to that budget is even more critical. These budget tips can help:

  • Pad your budget to account for extra expenses that inevitably crop up during the month.
  • Use a budget website or app like Mint or  YNAB to keep you on track.
  • Try the debt snowball method. Once you pay off one debt, roll that money over into the next debt you want to pay off.

4. Cut out the extras

It’s easy to forget all the online services you’ve subscribed to, so do a deep dive and unsubscribe from anything that isn’t a necessity. Do you really need Netflix, HBO, or that monthly organic food subscription box?

Three debt relief options you should explore

Getting help with medical expenses, student loans, or credit cards isn’t always easy, but you don’t have to face your debt alone. Here are three ways to find help.

1. Loan consolidation

If you have multiple loans to pay every month and some or all of them have high interest rates, it may be worth looking into loan consolidation. When consolidating loans, a lender issues a single personal loan, typically with lower interest rates. Nerd Wallet offers resources on different loan consolidation options.

2. Credit counselling and debt relief services

If you’re wondering exactly how to get help with debt, credit counseling and debt relief services might be a good jumping off point. Just be careful about which credit counseling or debt relief services you use, because not all of them are reputable. The Federal Trade Commission offers helpful tips to avoid scams.

3. Crowdfunding

People have found that crowdfunding is a fast way to tackle their debt when unexpected circumstances set them back financially. Through GoFundMe, you can easily reach out to friends and family members and get back on your feet and out of debt. GoFundMe offers free fundraising, allowing you to keep more of the funds you raise.

Every situation is worthy enough for crowdfunding, and people from around the world use GoFundMe for causes both large and small. It’s important to remember that nearly everyone experiences a time in their life when they have to deal with some kind of financial hardship. Your own experience might serve as a reminder to people that everyone deserves to receive help during tough times.

These are a few folks who were able to meet their fundraising goals through GoFundMe when they experienced a financial setback:

Holding on to My Home

Charles experienced a string of unfortunate events after leaving his job due to health issues. He had an incredibly difficult time finding another job, so he decided to complete his B.A. and M.A. as well as some other training courses specific to his career. Unable to make mortgage payments, Charles fell into foreclosure and more credit card debt.

“Hardship is a part of living—we all experience it. I am thankful to those who’ve known my story and have given me support.“

Charles wasn’t sure how to get financial help, but then he discovered GoFundMe. His family and friends rallied around him, donating over $20,000 to help him offset foreclosure costs and get back on his feet.

SECRETS Stolen Trailer

The members of San Diego based rock band SECRETS encountered a major setback in their musical career about two years ago. While wrapping up a tour, their trailer containing every piece of their musical equipment was stolen, preventing them from recording their fourth studio album.

“Without you, this band would not be here today.”

To keep their music dreams alive, the band members borrowed money and used their own credit cards—leaving them struggling financially two years later. To get back on their feet, the band started a GoFundMe and raised over $5,000.

Feel empowered to tell your story and eliminate your debt

Thousands of people start fundraisers on GoFundMe every single day so they can conquer their debt and the stress that goes along with it. You can find emergency financial assistance too. Take the next step in your journey to get rid of debt and sign up for a fundraiser today.

Start a fundraiser

Written by caitlin