How to Get Out of Debt With Low Income

Dayton Uttinger  | 

Things haven’t been easy for a long time now. No matter what you do, interest and late fees just keep piling up, and you don’t have the means to make it all disappear. You know that you’re supposed to pay off your debts, but how can you when you’re living paycheck to paycheck?

Well, there are a few solutions, but ultimately which one you choose will depend on the discrepancy between your income and your debt. Read your options below, and consider which one will work best for you.

Make Your Own Budget

If your have relatively minor debt, it might only require a lifestyle change to get everything back in order. To create your own budget, you have to be willing to be completely honest with yourself. This can be difficult to do, especially if you’re stretching your finances thin. Obviously, you need to plan for necessities first, even if that means having very little or none left for leisure activities. But some debts are worse than others, especially when it comes to your credit score. It’s usually smart to prioritize credit card debt over medical debt, for example.

However, if you lack the financial know-how or restraint to create your own budget, there are other options.

Seek Credit Counseling

Credit counseling is a process of finance education and management. You meet with a credit counselor that looks over your finances and works with you how to best boost your finances and your credit.

This can be a great option is you are clueless about how to manage your money. If you can’t make heads or tails of your bank statements, credit counselors have tons of free education resources that you can look over and learn from. The counselor themselves will walk you through their recommendations. They might even recommend you enroll in a debt management plan, where you hand over money to your credit counselor who pays your debts. This might sounds shady at first, but certified credit counselors can help you pay back your debt responsibly if you have problems managing your own money.

Negotiate Your Debt, Interest, and Repayment

You can negotiate your debt with your credit card company, but doing so might hurt your credit score. This can be especially difficult to do, as your credit card company is probably committed to getting what you owe them. They’re not about to just let money walk out the door. Some of your money is better than none, though, so you might stand a good chance to negotiate if your alternative is bankruptcy. However, if you are worried about qualifying for a loan, debt negotiation is probably not the way to go. Entering debt negotiation can prevent your access to a credit line or even harm your credit score.

Sometimes, however, you can simply remove various fees from your bill, which is unlikely to affect your credit. Definitely consider negotiating your debt if the amount you have is truly insurmountable, but try the previous two options before.

Repair Your Credit

If this debt is not entirely your fault, you may have a case for credit repair. There are companies that specialize in repairing your credit, but there is little that they can do for you if you are legitimately responsible for the debt. Repairing your credit means finding inaccurate items in your credit report and negotiating their removal.

This is one of the quickest ways to improve your credit score, but it’s also only available to a select few. More than likely, your debt is a result of mistakes or misfortune, which credit repair is unable to fix. Instead, you’ll have to focus on finding balance between your income and your debts.

It would be fantastic if you could just raise your income to make your debt manageable, but that option is available to very few. You need to focus on minimizing the debt you have and not incurring any more. Whichever option you choose to do so will depend on your personal situation, but they can all be a saving grace.


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Dayton is a chronic Wikipedia addict, which is detrimental to her social life but stellar for her writing. She resides in Boise, ID, surrounded by her own frantic outlines, highlighted encyclopedias, and potatoes. The latter was not by choice.

This post was updated November 13, 2017. It was originally published November 1, 2017.