While the average American household has acquired approximately $8,000 in consumer debt, many people have achieved the dream of living debt free. Reducing and eliminating your debt does not happen overnight. However, if you outline a realistic plan for reducing debt, you can become debt free in a few years.

Establish a Plan for Reducing Debt

Before achieving your goal, you must outline a detail plan for eliminating debt. To begin, gather all your credit accounts and unpaid bills. It is important to have an accurate debt amount. Individuals who earn a huge salary may be able to eliminate their debts by simply cutting expenses.

Record your monthly income and make a list of your monthly expenses Determine how much income remains after your have paid your bills for the month. This amount is your disposable income. Instead of frivolously spending this income, use the extra money to payoff your credit card balances.

If you do not have the extra income to payoff your debts, there are other options available to you.

Apply for a Debt Consolidation Loan to Reduce Debts

Applying for a debt consolidation loan to reduce your debts is a great way to eliminate high interest consumer debts. While a debt consolidated loan will not immediately erase your debts, these loans have short terms and low rates, which allow you to payoff your personal debts in less time.

There are three ways to acquire funds to consolidate debts. For starters, you can attempt to apply for a personal debt consolidation loan. Depending on the financial institution, you will need collateral or an excellent credit score.

Homeowners may apply for a home equity loan or line of credit. The funds received from the loan or line of credit may be used to payoff or reduce other high interest consumer debts. Be careful when accepting these types of consolidation loans. Home equity loans and lines of credit are protected by your home’s equity. With this said, the lender may foreclose your house if you do not repay the loan.

Debt Management and Consumer Credit Counseling Services

Another method for reducing debt involves establishing a relationship with a debt management or credit counseling service. These services will help you reduce debt and improve your credit rating by contacting your creditors and establishing better terms and rates on your credit cards and loans.

Debt Elimination or Debt Management. Which is the Right Choice for You - Best Syndication

Best Syndication

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Florida Debt Elimination Company Opens New North Office & Settles ... PR.com (press release), NY - Aug 2, 2008 New North Office will provide services for more than 1000 of CountryWide Debt Solutions clients with improved customer service and debt elimination. ...

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ISU offers non-credit finance courses - Terre Haute Tribune Star

ISU offers non-credit finance courses Terre Haute Tribune Star, IN - Aug 26, 2008 ... and list of your debts with balances and monthly payments (principal and interest only for mortgage) to develop your own debt elimination plan. ...

How to snowball your debt - 3x24 - Your Newspaper and News Magazine

How to snowball your debt 3x24 - Your Newspaper and News Magazine, Germany - Aug 26, 2008 There are at least two approaches to debt elimination. Psychologically, using a debt snowball offers big payoffs, payoffs that can spur you to further debt ...

Mortgage Elimination Scheme - WLOS

Mortgage Elimination Scheme WLOS, NC - Aug 26, 2008 The North Carolina State Bar has suspended a South Asheville attorney for his involvement in a debt elimination scheme. Attorney Paul Erickson's Asheville ...