Credit: alancleaver (flickr)

So, you’re in debt?  You’re going to think that it’s the end of the world, but the good news is that it isn’t!  Like anything in life, you’re going to find that you can either hire a professional for twice the price, or you can do it on your own for next to nothing.

Trust me, it’s not that hard to learn how to consolidate your debts.  As long as you educate yourself, you can really start knocking away at your debt.  Always remember that it’s going to take money to get rid of your negative net worth.  There are no magic trees of formulas!

#1 Transfer your debts to one credit cards – What you can do is find a balance transfer credit card.  Let’s say that you have 5 cards.  To make things easier, you can transfer all those balances onto one card.  As long as your balances aren’t too high, you should be able to do this.

#2 Home equity loans - If you own a home, call up your bank and work up a home equity loan.  The economy may be on the up and up, but you can always see what they can do for you.

#3 Retirement funds - I wouldn’t really go this route, but if you need to dip into your retirement funds, you need to do the math.  If your money is only making you 2% and you have 18% interest rates on your credit card, it’s a no brainer to pull out your funds and pay off the cards.

#4 Your bank - If you don’t have a mortgage or any other loan, check with your local credit unions or banks.  Tell them what is going on and see if they can help you out.  Some banks may be able to, while others are going to simply turn you away.

#5 Call up the credit card companies - People don’t do this and I don’t know if they are afraid, or if they just don’t know.  Simply pick up the phone, call up the credit card company and ask them to lower your rate.  90% of the time, they will lower it, or offer you some deal!

#6 Ask friends and family - I know this is something that many of you don’t want to do this, but if you ask a friend or family member, see what they can do for you.  While some may be willing to help, let them know how you’re going to pay them back.  If you have to, write up a legal contract.

#7 Meet with a nonprofit – There are a lot of non-profit agencies around in your area.  You can speak with a church, or if you wish, you can find a non profit online.   These people are here to help, rather than get money out of your pockets.

As you can see, its really not that hard to consolidate your debts.  It’s going to take action on your part.  By taking action, you’re soon going to find that your debt is going to slowly dwindle away!

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