7 Simple steps towards a tension free life

Paying your bills on time and getting debt free is a great way to get your finances back on track. Given below is a list of 7 steps on how to lead a debt free life.
Step 1 - Admit that you are in debt problems

The first step towards a debt free life is to admit that you are in debt. Leaving bills unpaid and avoiding creditor calls isn't the solution to your debt problems. In fact it makes the situation worse. However, the fact that you're reading this article implies you have already accepted that you are in debt and you're ready to take the next step.
Step 2 - Seek professional help to get debt free

Take professional help from a consolidation or settlement company. If you'd like to obtain lower rates and consolidate your bills into a single monthly payment, then debt consolidation program is the right option for you. But if you wish to reduce the outstanding balance, then you should get enrolled in a settlement program.
Step 3 - Free counseling to help you get debt free

The consolidation/settlement company will offer a no-obligation free counseling session. In this session, a consultant will analyze your financial situation and suggest the right debt solution for you. To make his task easier, you can prepare a list of your debts/bills. Next to each of your dues, put down the name of the creditor, the total amount you owe, the rate of interest and monthly payment. This will give the consultant a better picture of your financial standing.
Step 4 - The consultant prepares a monthly budget for you

Based on the total amount you owe and your monthly income, the consultant will help prepare a monthly budget for your expenses. This is to find out how much you are left with after paying your utility bills and other expenses. The amount left over will be used to pay off your dues.
Step 5 - The consultant negotiates with your creditors

In a consolidation program, the consultant negotiates with the creditors/collection agency in order to lower your rates and monthly payments. However, if you'd like to settle debts, the consultant won't negotiate for lower rates. Rather, he'll talk to your creditors about reducing your outstanding balance.
Step 6 - Start making payments

You need to make a single monthly payment to the consolidation company which distributes the amount amongst your creditors. This goes on for 2-6 years till you get debt free.

In case you choose settlement, you'll have to stop payments to your creditors and make monthly payment to the settlement company. The payments accumulate into lump sum cash after months. The lump sum amount is then paid off to the creditors/collection agency.
Step 7 - Say a big 'No' to any new credit card/loan

While you consolidate or settle debts, make sure you don't apply for any type of credit/loan. Otherwise, it will be difficult for you to get debt free.