Out Of The Hole

By Mary Hunt

December 14, 2011 3 min read

If you're in debt, you have to get out. But remember that a plan is only as good as your ability to stick with it. Just like diets, all of them work. But which diet will you stick with? No matter how effective the plan is in theory, if the regimen is outlandish and impractical, you will not stick with it.

When evaluating a get-out-of-debt plan, you should look for one with these characteristics:

--It is easy to prepare.

--It is simple to understand.

--It can be reduced to writing.

--Its results can be measured.

--It has a specific finish date.

I have developed the Rapid Debt-Repayment Plan, which fits these criteria and consists of four rules. If you diligently apply these rules to your unsecured debts, you will get out of debt in record time.

Rule No. 1: No more new unsecured debt. If you don't stop adding to the problem, you'll be like the homeowner with the kitchen fire, except instead of putting out the blaze that's ready to destroy the entire structure, you'll be pouring gasoline on it.

Rule No. 2: Pay the same amount every month. Whatever your minimum monthly payment is this month, fix it. That means that even if your creditor will accept less next month, you'll pay the same amount you paid this month for each of your debts until you are out of debt.

Rule No. 3: Line up your debts according to size, putting the one with the shortest payoff time at the top and the one with the longest term at the bottom.

Rule No. 4: As one debt is paid, take its payment and add it to the payment of the next debt in line. With much larger payments going to that second debt each month, it will reach $0 in record time. Then take both the first and second payments and add them to the third debt's payment until it is paid, continuing until all are paid.

You may be wondering, "Wouldn't it be better to line up my debts according to interest rate, with the highest in the first position, rather than the debt that will be paid off most quickly?"

Theoretically, that might be the way to go. Some financial experts advise that, in fact. But I have worked these plans every which way possible and still believe that the potential difference in interest is very minor compared with the benefits of using a plan that has a high probability of success. The RDRP is a plan you will stick with because it has big emotional payoffs along the way.

So, isn't it about time for you to get out of debt? I did, and thousands of others have. And even more are on their way. You can do it, too. And you can count on me to be right here cheering you on all the way!

If you want to see how this plan works, go to http://www.DebtProofLiving.com and click on "Rapid Debt-Repayment Plan Demo" under "Calculators and Managers." You're going to be amazed.

Mary Hunt's column, "Everyday Cheapskate," can be found at creators.com.

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