Many debt experts and personal finance gurus promote something called a debt snowball to help you get out of debt. If you haven't heard of this before, it's a method of paying down debts that can make a difference in how quickly you are able to manage your debt load. However, it's not a magic bullet that slays all debt, and it doesn't work for every situation. Here's a quick look at how a debt snowball works.
The idea of the method is that you create wins early on to motivate you to move ever onward to the goal of being debt free -- or mostly debt free. That means you order your debts from smallest balance to largest balance. You might make minimum monthly payments -- or whatever you can to keep from being sued -- on all debts, but you throw any extra money on the smallest debt because you can pay it off the fastest.
Once the smallest debt is paid off, you take the extra money -- plus the minimum payment associated with that small debt -- and throw it as the extra payment on the next debt in your list. By the time you're tackling your biggest debts, the idea is that you have a lot of extra money to pay it down because you've wiped out all these other debts.
Does the snowball method work? It does. Does it work for everyone? It does not. This method assumes that you can cut your expenses or raise your income just enough to have something extra to throw toward the smallest debt. Some people might have already trimmed and restructured and still come up short.
In cases when there simply isn't a penny left, or if you come up with negative pennies every month, then bankruptcy or other debt relief might be needed. Talk to a bankruptcy professional to find out what options you might have if snowballing isn't working for you.
Source: Nerd Wallet, "What Is a Debt Snowball?," Bev O'Shea, accessed Jan. 13, 2017