Im drowning in debt how to get out

By Matt Mayerle
Modified on May 12, 2023
I'm drowning in debt

If you’ve ever wanted to scream, “I’m drowning in debt,” you’ve come to the right blog. If you’ve ever actually screamed it, you’re our hero. Because being honest is financially healthy.

Even though you’re in financial trouble, you don’t have to stay there. A debt management plan will lower your stress level, get you debt-free, and back to working towards your goals. When it comes to building good financial habits, managing your debt should be at the top of your list. So if you’re drowning in high-interest debt, read on—help is here!

Spend Money Wisely: Create a Budget

Building a budget is the most critical thing you can do to get debt-free. A budget is a plan that puts every dollar you make into action. Budgets organize spending into categories and then prioritizes those categories to meet your basic needs, essential bills, and extras—in that order.

It is not uncommon to find the thought of a budget intimidating. Some people think that they can’t budget money on a low income. Others think they have so much debt that they can’t afford to budget because budgeting is strict and doesn’t provide any “wiggle room.” The truth is, a budget does all the money and debt management for you, which will give you more freedom. Instead of worrying about whether or not you can pay your expenses, you only need to follow your budget.

You don’t need to be an accountant on a spreadsheet expert to build a budget. If you’re new to budgeting, start simple. Gather all your paystubs and deposit information for the month and total them up to get your total income. Then, take all your other debts and group them into different categories. Group your basic needs in a separate category and your extras in another. Here’s an example of some basic categories:

Basic Needs (Must be paid)

  • Rent/Mortgage
  • Utilities
  • Groceries
  • Transportation (Gas, transit passes, etc.)
  • Insurance (Medical, Auto, Life, etc.)
  • Savings (including a separate emergency fund)

Non Essential Items

  • Personal Spending (gym memberships, subscriptions, clothing)
  • Recreation & Entertainment
  • Miscellaneous/Extra Spending

If your income exceeds your expenses, then you can cover all your bills. If your expenses exceed your income, you will need to cut unnecessary spending to balance everything out.

An excellent personal budget runs month to month. When you pay off a debt at the end of one month, you can adjust your expenditures and put more money towards paying off other debt in the upcoming month.

The Minimum Payment is Never Enough

With many loans—particularly with credit card debt—creditors will allow a minimum payment every billing cycle. This payment allows you to stay consistent and avoid any fees or penalties. And that’s about all that paying the minimum will get you. Even though it seems like a relief to have a small payment, it will do very little to reduce your balance.

Minimums are typically 2%-5% of the balance. Since your balance changes every month, your monthly payment fluctuates. Paying minimums makes your credit card payments challenging to include in your monthly financial planning.

Sticking to the minimum will mean paying the maximum when it comes to interest. Because interest compounds over time, you are charged a fee every day that you have a balance.

Paying more than the minimum due moves your credit card debt down at a fast, steady pace. No matter what your creditors say is due, pay more.

Double Down on Payments

What’s better than making your monthly loan repayment on time? Making two payments, of course!

If you get paid weekly or twice a month, try to make an additional payment. It doesn’t have to be as big as your primary payment; any additional money to your balance will be beneficial. Not only will extra payments help you eat away at your debt faster, but you will also avoid the late fees and penalties that commonly rack up. And, you won’t waste any extra cash on unnecessary spending.

Making significant and multiple payments will decrease your credit utilization, which will, in turn, improve your credit report and credit score.

Stop Creating Credit Card Debt

If you want to stop drowning in debt, you need to learn how to manage a credit card wisely. And the wisest thing you can do for your debt is to stop building it.

Credit card debt is one of the fastest pieces of debt that can pile up. Regardless of the cashback perks of airline miles you might earn, your credit card debt is holding you back. If you haven’t maxed your cards, stop using them right now. Every time you use your credit card, you put yourself further away from a debt-free life. Avoid using your credit cards until you can pay them off.

Settle With Credit Card Companies

If you have maxed out your credit cards, you could be feeling overwhelmed with debt. Even with your best budgeting efforts, debt repayment may look impossible—at least anytime soon. If you can’t figure out how to manage a large credit card debt, contact your credit card company and make an effort to negotiate.

After you fully understand the total amount you owe on the card, there are a few common settlement options available:

Workout Agreement

A workout agreement is a Debt settlement plan that will allow you to adjust your current repayment structure. You may be able to lower your interest rate, reduce your monthly payment, or remove past late fees. These actions won’t reduce your original balance. Instead, they will bring your account up to date and put you on a more manageable track towards repayment. Workout agreements are significant for people that are facing uncertain yet long-term financial issues.

Lump-sum settlement

With a lump-sum settlement, you can end up paying less than you owe. In many lump-sum settlements, the borrower ends up paying just the principal amount of the debt.

Lump-sum settlements can help you save thousands in interest and fees. But, you must be ready to pay settlement all at once. If you’re thinking about a settlement, know that you’re going to need a good amount of cash on hand.

Balance Transfer Credit Cards

A balance transfer is a fast way to pay off debt and save money. It is a strategy that allows you to move several accounts and combine them into one. Balance transfers are managed with a balance transfer credit card.

Many balance transfer credit cards offer lower interest rates and 0% introductory APRs, making them ideal for managing high-interest debt.

Like a consolidation loan, balance transfers provide lower interest rates than regular credit cards. So, if you use the balance transfer to pay off those cards, you can start repaying the loan with less interest.

There is usually a balance transfer fee of 3% for this transaction. That fee can be rolled into the consolidation and paid off with the loan.

If your credit score is less than perfect, you should consider an installment loan for bad credit as a consolidation option.

Hardship Program

Some credit card companies provide hardship plans for people who meet temporary yet unforeseen circumstances. Situations like serious illnesses or sudden job loss can qualify you to get your interest rates or minimum payments lowered. If you qualify for a hardship program, your account will go under a restructured repayment plan.

Debt Management Program

In a debt management program, debt management companies create relationships with your creditors to reduce your debt’s monthly payments and interest rates. These programs also remove or reduce late fees and penalties on your account. Acting on your behalf, a debt management professional will negotiate a repayment deal that you can afford. The goal of most debt management programs is to complete your debt repayment within 3-5 years.  

Nonprofit organizations like the National Foundation for Credit counseling offer debt management programs for those drowning in debt.


When the bills start to pile up, your debt can get out of control. The pressure of debt in tough financial times can make many people feel as if there is no way out. The fact is, we all make financial mistakes. But with a bit of planning, hard work, and discipline, you can stop drowning in debt and start swimming towards a future full of financial freedom.


7 Key Traits of People Who Are Debt-Free

Debt-Free Living: How to Get Out of Debt for Good

Read More
Several types of lenders specialize in easy loan approval for bad credit borrowers. These loans may not require a credit check or may have loose…
personal loans 700 credit score
A good rate for your personal loan will depend on your specific financial situation. While you may be eligible for several different types of personal…
2000 loan for bad credit
You can borrow up to $2,000 from personal loan options, some payday lenders who offer payday loans, title lenders, or possibly a pawnshop lender. Some…
loans like uprova
Uprova is an online lender that offers installment loans. Many low-credit borrowers apply with Uprova online, but is this the right choice for you?  Are you…

Quick And Easy Personal Loans Up To $2500*