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I have isolated my outstanding open debts that are hurting my credit. So at this point is it better to do a seek and destroy mission and pay each debtor/collector individually? or consolidate the debt into a single payment? (roughly $10,000 total debt)

If you consolidate, you ARE NOT paying the debt off. You are moving it from several debts to one debt, often at a relatively high interest rate, and often with a longer payback period, both of which cause you to end up wasting more on interest. In the mean time, you've also freed up your previously full credit lines, which allows you to start charging on those again, getting yourself back in trouble, only this time it will be worse because you already have a consolidation debt.

Here is a plan that has worked for many:
1. STOP using the credit cards. Not for rewards, not for automatic charges, not for anything. You are in a $10k deep hole right now. Every charge that you put on a card digs that hold deeper, due to additional interest and not putting payments toward your old debt. Trying to fill up that hole is made that much more difficult if your behaviors also keep digging it deeper.

2. Track your spending (every penny that you spend - the coffee/tea/soda/chips at the gas station when you fill up, the pack of mints from the vending machine at work....EVERYTHING.

3. Look at your spending and analyze where you can spend less. How can you cut your food bills? How much do you eat out, and can you do that less? What features can you cut on your cell phone and on your TV service? Can you get a roommate to split housing costs?

4. Put together a spending plan at that lower spending level, and allocate the extra money toward your debt. EVERY MONTH. Not just, I'll pay what I have left over at the end of the month, but EVERY MONTH, you pay at least the amount allocated toward your debt - more if you can. Treat it as a mandatory spending item, just like your rent/mortgage and your utilities.

5. Make a list of your debts, their minimum payments and their interest rates. ALL of your debts. The car loan, the credit cards, the student loans, the 90 day same as cash deal for the tires - anything that you owe. Put those debts into a payoff order. This is where you need to understand what will motivate you to keep you on track to pay the debt down:
- Highest interest rate first will cost you the least money
- Most hated to least hated might give you motivation in the beginning, to help get you turn debt payoff into a habit
- Smallest to largest debt will give you earlier successes in paying off individual debts, again to give you motivation in the beginning
- Smallest payment to largest payment can help if you are dealing with cash flow issues (like if your minimum payments add up to almost the amount you are allocating toward your monthly debt, even after cutting spending).

6. Make the minimum monthly payments on all of the debts except the one at the top of your list. That one (the target debt) will get your entire monthly debt allocation, minus the minimum payments on the other debts.

7. Any extra money that you come into (bonus, raise, gifts, etc.) add to the debt allocation for that month

8. Track your paydown and do a happy dance every time you reach a goal, like paying off a whole debt or cutting your debt by 10%

9. Lather, rinse, repeat

If you are willing to post your debts and your spending here, you will get lots of advice, which you may or may not be able to use.

AJ
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