Debt Restructuring: How to Get Out of Debt Intentionally & Efficiently

Debt can be overwhelming, but there are ways to approach your finances that make them less intimidating and make you feel in control.

What financial institutions often rely on, is their customers not fully understanding the language and systems that they are founded upon. By educating ourselves and sitting down with our financial documents to fully understand them, we are no longer left in the dark and debt becomes less wrapped in fear.

Having spent 20 years working in finance, I am familiar with all of the tricks financial institutions can play on its customers, and I'm here to help you navigate these waters. The first thing I love to teach my clients about is debt restructuring. So, what does that look like?

What is Debt Restructuring?

This is the process of prioritizing your bills based upon the interest rate to get the higher interest payments out of the way by paying them first, which saves you money on interest.

For example, let's say you have a total debt of $1000 across 3 credit cards. Credit card #1 has an interest rate of 28% (yikes!), credit card #2 has an interest rate of 10%, and credit card #3 has an interest rate of 1%. This month you may have $500 to pay towards your debt. By restructuring your debt, you would make the minimum payment of both credit card #2 & #3, let's call that $100 total, and put the remaining $400 towards your highest interest credit card, credit card #1.

This tactic is a really simple way to start getting familiar with your debt, create a healthy relationship with your finances, and gets you closed to your end goal of getting it all paid off.