How to Get Out of Debt in 8 Steps (Even If You’re Broke or Low Income)

Getting out of debt can feel impossible, especially if you’re broke, low-income, or just barely staying afloat. When every dollar already has a job, the idea of paying extra toward debt can feel unrealistic.

The good news? You don’t need a perfect budget or a high income to make progress. You just need a clear plan that fits your situation.

Below, we’ll walk through eight practical steps to help you get out of debt, even if money is tight, plus targeted advice for common situations like credit card debt, student loans, medical bills, and more.

Table of Contents

1. How to get out of debt based on where you’re starting
2. 1. Write down all your debt
3. 2. Assess your spending and make a budget
4. 3. Choose a debt payoff strategy
5. 4. Negotiate with creditors
6. 5. Get credit counseling
7. 6. Talk to a debt relief company
8. 7. Consolidate or refinance
9. 8. Get a bigger shovel
10. What this plan won’t do (but why it still works)
11. FAQ

Choose your situation: How to get out of debt based on where you’re starting

Getting out of debt looks different depending on your income, expenses, and the type of debt you’re dealing with. If you’re short on time or feeling overwhelmed, start with the situation that best matches your own, and then come back to the full step-by-step plan when you’re ready.

• If you’re broke or have no money
• If you have a low income
• If you’re trying to get out of credit card debt
• If you’re getting divorced
• If you have high medical bills
• If you’re drowning in student loans
• If you have tax debt
• If you need to get out of debt fast

1. Write down all your debt (balances, rates, and minimums)

The first and most important step is to add up your debt total. Take out a sheet of paper or open a spreadsheet and write down your creditor’s name, the amount you owe them, your interest rate, and your monthly payment.

Recent research shows nearly half of Americans don’t know the interest rate on their credit cards. Finding this information is important because it can help you with the next step, which is to identify a repayment strategy.

2. Assess your spending and make a budget

While you are developing your payment strategy, it’s also important to assess your spending and create a budget. If you’re trying to cut your expenses, the three areas to focus on are housing costs, vehicle costs, and food costs. These three categories tend to be the biggest drains on a budget. 

When you’re reviewing your spending and creating a budget, ask yourself whether there are ways to reduce your expenses. For example, can you move into a smaller home? Is there a more affordable car you can drive? Can you order out less? When you cut costs, you can reallocate those funds and accelerate your debt payoff journey.

3. Choose a debt payoff strategy: Snowball vs. avalanche

The two most common strategies are the snowball method and the avalanche method. With the snowball method, you pay off your debts from smallest to largest, which builds momentum and allows you to get quick wins early in your repayment journey.

The avalanche method is when you pay off your debts from the highest interest rate to the lowest interest rate. When you do this, you save money in the long term because you’ll spend less in interest. To decide which method is best for you, use an online calculator to compare the payoff timeline and the total amount you’ll spend in interest.

4. Negotiate with creditors

Interest costs and late fees can add time to your repayment journey, so another step you can take is to negotiate with your creditors. If you have debt in collections, call the collection company and offer a settlement. If you’re facing high interest rates, call your credit card company and ask whether it can lower your rate.

If you aren’t comfortable taking this step on your own, the next steps may be the better options for you.

5. Get credit counseling

If you need assistance with repayment, you can work with a certified credit counselor. A credit counselor can help create a payment plan for you.

American Consumer Credit Counseling is an excellent nonprofit with low fees, an A+ Better Business Bureau rating, and much more.

6. Talk to a debt relief company (when other options aren’t enough)

The best debt relief companies, in the table below, can be a viable option for people with overwhelming unsecured debt who can’t realistically keep up with minimum payments.

National Debt Relief is one of the most established providers in this space and is best suited for borrowers who:

• Have large balances in credit cards or personal loans
• Are already behind or close to missing payments
• Can’t make progress using snowball, avalanche, or consolidation alone

These companies negotiate with creditors to settle for less than the full balance owed. In exchange, you typically stop making payments during the negotiation period and pay a fee based on the amount settled.

Debt relief isn’t right for everyone, and it can temporarily harm your credit score, but for borrowers facing genuine financial hardship, it can provide a structured path forward when other strategies no longer work.

7. Consolidate or refinance debt to lower interest and simplify payments

Another strategy that can accelerate your repayment journey is to consolidate or refinance your debt. Consolidating is when you combine several payments into one. You can do this by getting a balance transfer credit card, taking out a debt consolidation loan, or consolidating your federal student loans. 

Refinancing is similar; its goal is to reduce your interest rate by moving your balance to a new loan. Refinancing has several pros and cons, especially when it comes to student loans. It’s important to take the time to research whether this method would work for your personal situation.

8. Get a bigger shovel

In addition to creating a budget, cutting expenses, and consolidating or refinancing, find ways to earn more income. Whether you start a side hustle or take on additional hours at work, remember, you don’t have to work extra hours forever. However, taking on side jobs for a short period can help you achieve your goal of being debt-free faster.

What this plan won’t do (but why it still works)

Getting out of debt is a process, not a switch you flip. This plan is designed to help you make steady progress, but it’s important to set realistic expectations.

• This won’t eliminate debt overnight
• You may need to make temporary trade-offs
• Your credit score could dip before it improves

What it will do is help you move from feeling stuck to having a clear, actionable plan, and that’s often the hardest part.

How to get out of debt based on your situation

Not all plans work for all people. Below is targeted guidance based on the most common debt situations we see.

How to get out of debt when you’re broke or have no money

If you’re broke and living paycheck to paycheck, your first goal isn’t aggressive payoff; it’s creating breathing room.

Focus on:

• Reducing immediate expenses where possible
• Increasing income, even temporarily (overtime, side work, short-term gigs)
• Avoiding new debt while you stabilize

If you’re already behind on unsecured debts like credit cards or personal loans and can’t realistically catch up, a debt relief company such as National Debt Relief may be worth exploring. It specializes in negotiating settlements for people facing real financial hardship, but it’s best viewed as a last-resort option, not a quick fix.

How to get out of debt with a low income

A low income doesn’t mean you can’t make progress; it just means your plan needs to be realistic.

For many low-income borrowers:

• The debt snowball method works well because it frees up cash flow quickly
• Small wins help maintain momentum
• Even modest income increases can make a meaningful difference

The key is consistency, not perfection. A plan you can stick to beats an aggressive plan you can’t sustain.

How to get out of credit card debt

Credit card debt is often the hardest (and most expensive) to escape because of high interest rates.

Your best options typically include:

• Using the debt avalanche method to target high-interest balances first
• Applying for a 0% balance transfer card if you qualify
• Consolidating balances into a lower-interest personal loan

If minimum payments are no longer manageable and balances keep growing, National Debt Relief can help negotiate credit card settlements, particularly for borrowers who are already behind or close to missing payments.

If you’re feeling overwhelmed by high-interest debt, remember: You’re not alone, and you shouldn’t feel bad about your situation. 

The first step is to create a repayment plan that fits in your budget while also considering:

• Negotiating with creditors
• Creating a spending plan along with realistic goals
• Considering a side job or part-time income
• If needed, consulting a counselor or therapist who specializes in behavioral spending (specifically if spending money carelessly or extravagantly is one of the barriers)

Erin Kinkade, CFP®

How to get out of debt if you’re getting divorced

If you are getting divorced, hire an attorney. An attorney can assess your current financial situation, tell you what payments you’re responsible for, and refer you to resources, such as a credit counseling service, that can assist you. The U.S. Department of Justice also has a list of pro bono legal service providers if you need financial assistance.

How to get out of debt from medical bills

Medical debt is one of the most negotiable forms.

Start by:

• Asking about payment plans or financial assistance
• Requesting itemized bills and reviewing for errors
• Negotiating directly with providers before it goes to collections

If medical debt is combined with other unsecured debts and you’re unable to negotiate on your own, a reputable debt relief company may help, but only after other options are exhausted.

How to get out of student loan debt

Your options depend on whether your loans are federal or private.

• Federal student loans: Income-driven repayment plans, consolidation, and forgiveness programs may help lower payments.
• Private student loans: Refinancing may reduce your interest rate if you qualify.

You have tax debt

If you have tax debt, start by contacting the IRS to explore available programs, such as:

• Payment plans: These allow you to pay your balance over time in smaller, manageable amounts.
• Offer in Compromise (OIC): If you can’t pay the full amount, you may qualify to settle for less than what you owe.
• Currently Not Collectible (CNC) status: If paying your taxes would cause severe financial hardship, CNC status pauses collection efforts.

It’s important to act fast to avoid penalties and interest from compounding further. Working with a tax professional, such as a reputable tax relief company, can also help you navigate these options and find the best path forward for your situation.

How to get out of debt fast

Getting out of debt fast usually requires a short-term intensity boost.

That might mean:

• Temporarily cutting discretionary spending
• Applying bonuses, tax refunds, or side income directly to payments
• Pausing nonessential financial goals for a defined period

Faster payoff almost always involves trade-offs, but those trade-offs don’t need to be permanent.

FAQ

What is the fastest way to get out of debt?

It often involves a combination of aggressive repayment strategies, such as the snowball or avalanche methods. The debt snowball approach targets your smallest debts first, giving you quick wins, while the avalanche targets the highest interest rates first to reduce overall interest costs. 

To accelerate repayment, consider increasing your income through side gigs, selling unused items, or cutting nonessential expenses. Refinancing or consolidating into a lower-interest loan may also help if it reduces your monthly interest payments.

Can you pay off $10,000 of debt in a year?

Yes, this is achievable with a focused plan and disciplined budget. This would require an average monthly payment of about $834. Cutting unnecessary expenses, boosting income, and prioritizing repayment can help reach this goal. Using tax refunds, bonuses, or side income to make extra payments can also accelerate progress.

Can you pay off $50,000 of debt in a year?

Paying off $50,000 in a year is possible, but it requires a high income or significant lifestyle adjustments. On average, you’d need to pay around $4,167 per month to meet this goal. Strategies might include a strict budget, substantial income increases (e.g., overtime, side jobs), or negotiating lower interest rates with creditors. 

Refinancing or consolidating to lower your monthly interest might also help. Paying off $50,000 within a year might be more realistic if you can apply a large portion of your income to payments while minimizing other expenses.