Due to the high amounts of consumer debt that plague the people of America, debt reduction is one of the biggest topics in personal finance today. Everyone wants to know the best way to get out of debt. There are those that suggest debt manangement options, such as debt negotiation and other similar tacks. Others still recommend bankruptcy as a way to get out of debt, even after tougher laws that make it more difficult to erase debts through bankruptcy. Unfortunately, these paths often result in a damaged credit score. Myself, I think aggressive debt reduction is the way to go.

Aggressive debt reduction

Rather than debt management, I am a fan of creating a debt reduction plan, and then using it to systematically dismantle your debt. By taking a measured and planned approach to eliminating debt, you can get out of debt at a reasonable rate and improve your credit score at the same time. The key is to organize your debts and then aggressively pay them off one at a time. Keep paying the minimum on your other debts, and concentrate your debt reduction efforts on one debt. Once that debt is finished, transfer your energy to the next. By systematically attacking your debt, you can reduce it relatively quickly, without endangering your ever-important credit score.

CNN Money offers this handy debt reduction calculator that can help you make a plan to get out of debt.

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