"Be debt free by next January" is a common New Year's Resolution. Thousands of people have accumulated debt. Some of it has been by necessity. Mortgages, car payments, student loans... all of these are things many find necessary for day-to-day living. Add credit card debt to the mix and there is a recipe for money problems. People who once lived above their means are now looking for a way to be debt free.

If making the minimum payments on your monthly credit bills has become too much for you to handle, then you know you are in big trouble. Paying just the minimum does not take care of the principal and if you cannot even do that much, you debt is either already in or headed for collections. Resist the urge to screen your calls. Avoiding the collectors is only going to make the problem much worse.

First of all, to be debt free, you must talk to your creditors. Get a copy of your credit report from all three credit reporting agencies and gather all of your bills together. Your first priority is to take care of the reported debt on your reports and pay off the debt that has the highest interest rates. Stop using credit cards and try to negotiate with creditors.

Do not use your credit cards anymore. If you have to, cut them up into tiny pieces to keep yourself from falling into temptation. Then start calling debt consolidation services and ask them what they might be able to do for you. Some of these services can negotiate with creditors to lower your interest rates or even take a smaller amount to settle the debt. They then add the rest of your debt together, pay it off, and charge you for the loan. The interest rate is usually lower than what you have been paying and if they have successfully lowered your debt, you will be better off utilizing their services.

If you cannot find a debt consolidation company that is able to work with you to lower your debt, then your only other alternative may be to file for bankruptcy. Whether you have settled debt yourself, used a consolidation firm or filed for bankruptcy, you must stop accumulating more debt. Do not apply for more lines of credit until you have settled what you already owe. Do not just be debt free for a few moments. Do your best to stay debt free for life.