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Bankruptcy: If you've gotten yourself too deeply into debt, and debt repayments are ruining your life and the lives of your family, then you can file for bankruptcy. That's what bankruptcy is for. That is, bankruptcy is a humanitarian service for those who cannot cope with their debt and who need a lifeline and a fresh start. The disadvantage of bankruptcy is that you may lose your home, and your credit rating will be damaged for a long time. Bankruptcy effectively puts someone else in charge of your finances to pay your debts. They will sell your assets and garnish your wages until the debt is paid or the bankruptcy expires (eg, after three years).   thesource (378)

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Make a spreadsheet of all your credit cards, loans etc, how much you owe and how much savings you have. A running tally of your total debt minus savings and money owed to you will motivate you to reduce your debt levels. You can create your own running equations for almost anything, including your next month's interest and minimum monthly payment, total debt and interest paid over the next year, and total minimum monthly payments per month. By making a slightly higher monthly payment, you can use this online calculator to see how much interest it will save you over what timeframe compared to the compulsory minimum monthly payment: link For those who find it difficult to imagine why someone with credit card debt would have any savings in the bank, the average interest bearing account does pay more than the lower (sub 7%) interest rates on credit cards. So it makes no sense to pay off a card that is charging less in interest than the money would make in interest by sitting in a bank account. However, you do have to pay tax on interest as it is taxable income.   myxlfidian (150)

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An alternative method of paying off debt is to pay off the smallest debt first. The theory goes that the psychological kick of beating a debt is worth more than saving a bit on the interest but having to still have it hanging over your head. I can tell you it worked for me. I paid down one card nine(9) months ago and still feel like I conquered it (and still have as it has always been paid in full since). I recommend you shuffle your debts with balance transfers to the lowest interest rates (call your credit providers to get those details as balance transfer rates are always different than other rates). Whatever card has the smallest balance thereafter is the one you should tackle.   myxlfidian (150)

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