When you are facing mounting debts, paying some of them off might seem like it is impossible. It is understandable that you might want to review some of the ways that you can get out of debt. One of these options is to use the debt snowball payoff method.
The debt snowball method uses a mental trick to help you pay off accounts. You start by paying as much as you can, while still paying your other bills, on the smallest debt you have. Once this debt is paid off, you move to the next smallest debt. As you move down the list, you put what you spent on the previously paid off debt toward the next debt on the list.
The theory behind this is that seeing those balances go down and accounts go away will help you to get the momentum that you need to keep paying off your debts. This should give you the motivation you need to keep on going.
Of course, this method could mean that you end up paying more in interest on those higher balance accounts. It is important that you think about this if you are going to try this method.
Another option that you have, which many people utilize when debts are crippling, is filing bankruptcy. This would allow you to get the relief from debt that could help you to work toward a fresh financial future. If you are considering this option, think about your finances carefully so you can determine if you are eligible to file Chapter 7 or if you should file for Chapter 13, which would require that you repay some of the debts on a schedule set by the bankruptcy trustee.
Source: Dave Ramsey, "How to Get Out of Debt With the Debt Snowball Plan," accessed June 13, 2017