strives to provide our users with helpful information while remaining unbiased and truthful. We hold our sponsors and partners to the highest industry standards. Once vetted, those sponsors may compensate us for clicks and transactions that occur from a link within this page.

Whether you’re a few hundred bucks in or owe tens of thousands, getting out of any amount of debt can be stressful. If you’re juggling bills, putting off payments, or dodging collectors, it can feel overwhelming. But it doesn’t have to be – especially not in 2022.

This year, we want to help get you where you’d like to be financially. You’ve come to the right place at just the right time. Because even with limited income, you can get out of debt with the right strategy. And we’re here to help you learn how to get debt-free in the quickest way possible.

Table of Contents

Evaluate your finances

Assess your debt

Start by writing down everything you need to know about each debt you owe. It’s always best to figure out exactly where you stand. That means you’ll have to make note of every debt you owe. And we’re not just talking loans and credit cards. We mean everything from child support to court fines and even collections for utilities.

You need to figure out who you owe, what you owe, and where you are with your payments. Also, jot down the interest rates for your debts to help you keep better track of where your money is going. To help make it easier to keep track of, we’ve provided a free debt worksheet below.

Tip: For any debts that are behind, make sure to note how billing cycles each debt is behind. And if a debt is in collections, make sure to note when it first became delinquent. This will be important later as you set priorities for repayment.

Download’s free debt worksheet »

Check your credit

Another smart move is to see where your credit score stands. So, start by requesting your credit report and reviewing it. You can request credit reports through any of the three major credit bureaus, or you can download reports for free through Otherwise, you may want to try using a credit monitoring tool. If you have good credit, then you’ll have more options for debt relief.

Review your budget

The best way to review your budget is to compare how much income you have coming in versus how much is going out toward expenses. From there, you’ll have to figure out how much capital—aka money—you can generate for repayment plans or settlement offers. You’ll also want to make sure you have no “spending leaks,” which is excess spending you might not notice until you write everything down.

Options for budgeting:

Get a free evaluation to help you identify the right solutions for your needs and goals.

Find a SolutionCall To Action Link

Understand the six ways to get out of debt

Regardless of what or who you owe, there are a few ways you can become debt-free. Depending on the status of your debt and how much you owe, you may need more than one solution.

Pay your debt off with a repayment plan

Trying to figure out which repayment plan works best is dependent on your situation. Everyone has a different method of approaching repayment plans. Thankfully, there are a few methods to choose from. So, start by figuring out which one is right for you.

First, there’s the debt snowball method. This method requires that you pay off your smallest debts and make your way up the debt hill. Once you pay off one debt, you set your sights on the next and take them on one by one instead of all at once.

If that method isn’t for you, you may want to consider trying the debt avalanche method. This encourages you to rank your debts by interest rate and not by amount. Generally, this method isn’t recommended for people on tight budgets. Why? Because usually the debts with the highest APR are also the debts with the highest balances.

If your debt is specific to federal student loans, then there are a range of repayment plans that you can use to pay it off. Some focus on repaying your debt as quickly as possible. Others help lower your payments if you’re struggling to keep up with the bills.

Finally, if you have tax debt caused by back taxes, you can use an Installment Agreement (IA) to pay it off.

Consolidate your debt

Debt consolidation refers to any debt relief option that rolls all debts into a single monthly payment. The goal is to pay back all that you owe more efficiently by reducing or eliminating interest charges and focusing your money on paying off the principal (the actual debt you owe). This helps minimize damage to your credit score.

There are two ways to consolidate debt: You can apply for new financing and use the new credit line to pay off your existing debts. Or you can enroll in a debt consolidation program that pays off your existing debts to the original creditor.

How you consolidate your debt will depend on what types of debts that you have and your credit:

  • If you only have credit card debt and good credit, you may want to consider a balance transfer.
  • If you have credit card debt and student loans to repay and have good credit, you can consolidate them with a debt consolidation loan.
  • If you don’t have good credit, then you can use a debt consolidation program to consolidate, although you will not be able to include student loans.

Settle for less than you owe

Debt settlement is a little unique in comparison. While your debts may still be rolled into one monthly payment, it will affect your credit differently than consolidation. On top of this, you end up paying less than you originally owed. You can do this by negotiating a settlement agreement with your creditor on your own, or you work with a debt settlement company.

Debt settlement is a popular solution for credit card debt and debt collections.

If you have tax debt, then you use a specialized solution to settle your debt called an Offer in Compromise. This allows you to clear your debts with the IRS for a percentage of what you owe.

Qualify for debt forgiveness

An alternative option to consider would be a debt forgiveness, which erases debt without penalties. Once you meet certain eligibility requirements, a lender will forgive the remaining balances on your debts without any added fees or penalties. And they will report the debt as paid-in-full to the three credit bureaus.

Forewarning, debt forgiveness is fairly rare. The most common type of debt forgiveness occurs with federal student loan debts. However, to qualify, you must be in the military or a public service profession, like nursing or teaching.

Another form of forgiveness comes in the shape of tax debt forgiveness. In this case, you would have to prove you are not legally responsible for the debt, which happens in “Innocent Spouse” cases. For example, you may prove your spouse incurred tax debt without your knowledge.

Discharge it through bankruptcy

If none of the options above will work for you then it may be time to consider bankruptcy. Bankruptcy discharges most – not always all – of your debt. Chapter 7 bankruptcy is usually the quickest option because you can clear your debts in as little as 4-6 months. Chapter 7 liquidates assets that don’t qualify for exemption, so you can get a clean break as quickly as possible. But be aware that you will incur a ten-year penalty on your credit report with a Chapter 7 filing.

Alternatively, consider opting for a Chapter 13 bankruptcy filing. It takes between 36-60 months to complete. Chapter 13 bankruptcy sets up a repayment plan that lets you pay back at least a portion of your debts before final discharge. And your credit report penalty is shorter at seven years.

And note that it is possible to discharge most debts through bankruptcy, even student loans. However, with federal and private student loans, you must show that by not discharging the debt you would suffer continued financial hardship. This can be extremely difficult to do, but it is possible with the right attorney.

Wait it out

If all else fails, you can always wait for the statute of limitations to expire. Debt collectors only have a set window of time that they can legally pursue you for a debt. When that clock runs out – usually at 10 years depending on the state – collectors can no longer sue you for the debt in civil court.

This doesn’t only apply to credit cards, but also utilities and medical bills that have gone into collections. It can also apply to IRS collection efforts. The IRS will only attempt to collect on back taxes for ten years. After ten years, they will stop garnishing your wages or pursuing any further collection actions.

Be aware that this won’t work for student loans. There is no statute of limitations on collection for federal student loans. So, you can be pursued for what you owe indefinitely in this case.

Word of advice: Be careful what you say to debt collectors. If you make a statement acknowledging that you owe debt, then the statute of limitations may be reset.

Develop the best plan to get out of debt fast

Now that we’ve gone over the various methods of getting out of debt, let’s figure out which option or combination of options works best for you. Start by asking yourself a few simple questions:

  • What debts do you have that could be good candidates for consolidation?
  • Looking at your average credit card APR, figure out how many interest rates you can negotiate?
  • If you have student loans, are your loans private or federal?
  • How many of your debts are in collections that would fare better with debt settlement?
  • How many debts that are charged-off or in default are close to the statute of limitations in your state?
  • Would you be better off declaring bankruptcy?

Be aware that you’ll want to consolidate before opting for settlement. Since settlements can damage your credit score, you could end up becoming ineligible for many consolidation solutions. Consolidation is usually the first solution you should opt for since it simplifies your payment schedule and it won’t damage your credit.

Get the right debt help

Now, it’s time to find the right debt solution. Set up times and costs both vary depending on which solutions you apply for. For example, getting approved for a debt consolidation loan can take a few days. Comparatively, the consultations for a debt management program or a settlement program only take an hour. However, the enrollment into a debt management program can take a few weeks to complete while the credit counseling team contacts your creditors to get lower rates and their agreement to accept payments through the program.

Note that when it comes to settling medical debt collections, it may be a good idea to talk to the original service provider first. They may be willing to work out a payment plan and cancel the collection account.

Solution Time Cost
Balance transfer 1 hour to apply, 3-5 business days to receive card No upfront costs; avoid annual fees
Consolidation loan 1 hour to apply, 7 days to get approved Loan origination fee, averaging 1% of amount financed
Debt management program 1-hour consultation, 3-4 weeks to get approved Varies by state, capped at $79
Debt settlement program 1-hour consultation 2-5% of amount settled, paid upon settlement
Federal student loan repayment plans 2-3 hours to apply Free
Student loan refinancing 1 hour to apply, 7 days to get approved Loan origination fee, 1% of amount financed
IRS Installment Agreement 1 hour to apply, up to 30 days to get approved $52 setup fee for Direct Debit, $120 setup fee for payroll deduction
Tax debt settlement (Offer in Compromise) 3-6 hours to set up, 4-6 weeks to get approved $186 application fee

Find the solutions you need, no matter what types of debt you have.

Free EvaluationCall To Action Link

Become debt-free

Once you have your solutions set up, it’s time to set up your finances to support your journey to become debt-free.

To help you stay on track, follow these tips:

Set a budget

It’s always a good idea to re-evaluate your budget so you can adjust your spending. Your budgeting goal as you try to get debt-free should be to avoid any new credit card charges. You also need to build in as much savings as possible to cover emergencies and unexpected expenses.

Look for ways to increase income

Once your plan is put into place, you may consider taking steps to increase your income. More income means you can pay off debts quicker. So, if you can make larger payments to eliminate transferred balances or make extra payments on consolidation or refinanced loans, it will be better for you in the long run.

You can try out a few different options. Start by asking for a raise at your current job or maybe try and work more hours. If you can land overtime, go for it! And if these solutions fall through, you can always try supplementing your incoming with a side gig, freelance work, or even a part-time job. Selling items you hardly use or no longer need is another great way to pocket some cash. If all else fails, you can always downsize or cut expenses whenever and wherever they allow.

Don’t self-sabotage

As you work your way out of debt, avoid doing anything that can and will sabotage your efforts. Make sure to take every step possible to also avoid any new debt.

  • If possible, put off buying a new car or home until you’re out of debt.
  • Only open a new credit card for the purpose of consolidating or refinancing existing debt.
  • Stay on top of any medical bills so you can avoid new collections. If your insurance is supposed to pay, make sure they do so and cover everything they are supposed to.
  • Carry cash instead of heading out with a credit card in hand. This will help you avoid overspending.
  • If taking that vacation is going to rack up charges on your credit card, postpone it as a treat to yourself once you’ve accomplished paying off your debts. But if, and we mean only if, you have managed to save a little on the side to keep you from racking up those debts again.
  • Set up an emergency fund so unexpected expenses and emergencies don’t creep up on you.

Keep an eye on your credit as you go

It’s also smart to keep an eye on your credit. That way you can make note of your updated account statuses as you bring them current. You’ll also want to make sure your credit history shows all payments as made on time.

How to get out of specific types of debt

There are a wide range of options depending on what type of debt situation you’re trying to get out of. Whether you’re dealing with credit card debt, student loan debt, or tax debt, there are solutions. So, let’s go over the various available options.

Credit card debt

There are quite a few options if you’re looking for relief from credit card debt. There are a few do-it-yourself options. But if you would feel more comfortable with the help of a professional, you can seek out debt relief programs.

Do-It-Yourself Relief Options Relief Services
Forbearance Debt consolidation program
Interest rate negotiation Debt settlement programs
Balance transfers (credit consolidation)
Personal consolidation loan
Workout arrangement
Settlement agreement

Most credit users opt for do-it-yourself solutions before seeking professional help. But if you’ve got high balances, it may seem impossible trying to clear your debts. So, seeking out help becomes the next step. Here you have two options:

If most of your accounts are current and you do not want to damage your credit, you can call a credit counseling agency. These agencies run debt management programs that are designed to eliminate unsecured debt. With this relief option, you pay back your principal in full, but your rates are reduced or even eliminated. You’ll only make one monthly payment, and your credit score stays intact and may even improve while you’re on the program.

If you’re already behind and most of your debts are in collections, you would seek the help of a debt settlement company. A debt settlement specialist will negotiate with your creditor to reduce your principal. So, you are no longer paying on interest and you only pay a portion of the original amount.

Once you complete the debt settlement program, you’ll be free of debt. However, it may take some time to rebuild your credit rating.

Student loan debt

There is a wide range of methods for student loan relief. But the options also depend on whether you have federal or private student loans. And beware that if you use private refinancing for student loans, you will lose all eligibility for federal relief.

For relief options on federal student loans:

  • Deferment: This option allows you to temporarily suspend debt payments. Once you get a lender’s approval to pause monthly payments, you won’t incur penalties and it won’t negatively impact your credit.
  • Forbearance: Here a lender agrees to reduce or suspend monthly payments. The periods are generally shorter than a deferment would be. But, forbearance is typically granted if you contact lenders before or when you first experience financial hardship.
  • Federal Direct Consolidation Loans: This allows you to consolidate multiple federal education loans into one loan at no cost to you. Once the consolidation is complete, you will have one single monthly payment.
  • Federal Repayment Plans: The U.S. government created a series of federal student loan repayment plans to help grant relief to indebted borrowers. And whether you choose cost savings or monthly payment savings, you only have to worry about making one monthly payment.
  • Public Service Loan Forgiveness: The Public Service Loan Forgiveness (PSLF) program forgives the remaining balances on federal Direct Loans once you’ve made 120 qualifying monthly payments. This would have to be done under a qualifying repayment plan while you’re working full-time for a qualifying public service employer, like the fire department or a school.

Private student loans relief options:

  • Student loan refinancing: The goal of refinancing is to lower the rate applied to your debt. It can also result in lower monthly payments. However, there is no federal program for refinancing student loans. You would have to go through a private lender.
  • Private student loan settlement: With private student loans, you can try negotiating a settlement yourself or you can work with a debt settlement company. In most cases, a settlement offer of at least 50% of what you owe is needed in order to be accepted by the lender.

Tax debt

It can be tough trying to find the right relief option for tax debt. The IRS has broad collection powers that don’t require court orders. So, they can garnish your wages, intercept tax refunds, place liens on properties, or levy bank accounts. They can do all this without ever suing you in civil court.

It’s also worth noting that tax debt relief strategies tend to have special names for each program. For example, deferment is referred to as Currently Not Collectible (CNC) status, or settlement is known as Offer in Compromise (OIC).

No matter what kind of debt you have, can help you solve it.

Find a SolutionCall To Action Link


Did we provide the information you needed? If not let us know and we’ll improve this page.
Let us know if you liked the post. That’s the only way we can improve.

Article last modified on June 23, 2022. Published by, LLC