Credit.org in the media: “3 Steps to Help You Get Out of Debt” from AARP.com

We talked to Ingrid Case of AARP.com last year for an article, “3 Steps to Help You Get Out of Debt.”

In the article, we talked about the growing number of older debtors who are coming to us for help. Because retirees have smaller earning power and less time to grow their savings, their debt problems are particularly challenging.

Our advice is focused on taking action; instead of being paralyzed by debt problems that invaded their lives. Debtors of any age should take steps to combat their situation, as debt is a familiar companion for most in the United States.

Step one is to “Stop the bleeding.”

We want people to stop borrowing as soon as they think they might have a problem. In fact, in our debt counseling sessions, one of the first steps is to cut up a client’s credit cards. This is a powerful moment that signals the beginning of the road to financial recovery.

For modern consumers, it’s also important to clean up online accounts by deleting payment information on file. Make it inconvenient to spend using credit cards, and you’ll do it less often.

Step two is “Start a pay-down plan.”

For this step, we talk about the two most popular methods of debt payoff, the debt snowball and the debt avalanche (we discuss these in more detail here.)

Regardless of the payoff plan you start, we urge people to automate their debt payments. Forgetting a debt payment has big, negative financial consequences, so avoid that risk by setting up automatic payments for all of your bills.

Step three is “Work on the rest.”

Everything else that is adding to your financial burdens —like transportation, medical expenses, and loans like student loans and your mortgage – should come next.

In a real crisis, it might make sense to get rid of one’s car altogether, especially for retirees. It’s certainly not a good idea to get a new car loan or lease if you’ve already got debt problems with credit cards or other revolving debts.

For medical debts, deal with them right away, before they get sent to a collection agency. If you are proactive and can get them reduced or get on a long-term payment plan, you’ll have an easier time than dealing with a debt collector later.

The article also advises people to make their mortgage payments in full, but not to pay any extra while struggling with debt. That’s good advice; your mortgage is your most important bill every month, but keep any extra funds available to reduce debts.

Getting professional help

The article ends with some “bolder steps,” namely to seek professional help if necessary.

The place to start is debt counseling or financial coaching. Talk to a certified coach who can help you create a budget and set up a payoff plan with reduced monthly payments.

For your absolute last resort, bankruptcy may be necessary. In that case, start with the necessary pre-bankruptcy counseling at bkhelp.org.

We’re glad we had the chance to talk to the AARP and help their readers understand how to get out of debt; we’re always available to any audience looking for sound financial and credit advice.

Speak to our certified Debt Coaches to review all of your options and discuss best strategies for getting out of debt.Speak to our certified Debt Coaches to review all of your options and discuss best strategies for getting out of debt.