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Where is the best place to go to get out of a big debt such as school, car, and credit?

I need info on how I can get help to pay these bills. #financial-planning #debt #student-debt #loans #finance

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Jeff’s Answer

Please be very careful if you go to a credit counseling agency, they often negotiate a big reduction in credit card or car loan debt in exchange for a payment “right now” but the credit card or car loan company files a form calling their write off of debt as income for you on your taxes. Before I would do so, I would try to get daily expenses down so I’d have funds available for “credit counseling” or negotiating debt down by myself. I do so, and I advise others to do so following the “Automatic Millionaire” method from the book of the same name. I find a way to cut daily expenses such as carpooling with a coworker or bringing my own coffee and I put that automatically into a separate account to pay down debt. You also may want to do an estimate of you own taxes using a 1040 and see what that “income” from negotiating down debt would be. Let me know if any of this is interesting to you and you like more details or help with (1) ways to negotiate debt (2) automatic savings planing or (3) estimating taxes.

All the best,

-Jeff Y.

Jeff recommends the following next steps:

Write down a list of credits and whom you would call to negotiate
Create a plan to save money automatically millionaire style, create a separate bank account to use this money to pay down debt or pay taxes on “debt forgiveness income”. (Check this book out from the library if possible. It’s a very quick read)
Estimate tax implications of debt write down
Call creditors and negotiate debt down or possibly just lower credit card rates which doesn’t count as income.
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Paul’s Answer

If you need professional advice on how to establish a budget so you can pay off your bills faster I suggest you speak with a Certified Financial Planner. You can go to  https://www.cfp.net/ and click on Find a CFP Professional to locate one in your area. In addition, many of the big banks have financial advisors on site so you could also check out your bank.


If you would prefer to do it on your own there are plenty of websites that discuss budgeting that you can utilize. Remember that you will have to decrease your discretionary spending (non-essential items) and maybe increase your income by working more hours if you are paid hourly or getting a second job. This means cutting back on going out to eat, movies, shopping for clothes, etc.

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Marco’s Answer

Make financing quotes on the banks you trust, check the monthly installments, if you can afford it, and interest rates. Rule number 1, do not spend more than you can earn.
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