According to bankruptcy filing statistics released so far this year, we’re on track to hit more than 1.5 million bankruptcy filings by the end of 2010, which suggests that plenty of us are dealing with significant debt.

The good news, according to a recent article from WalletPop.com, is that on average, we owe slightly less on our credit cards than we did this time last year ($4,951 compared to $5,719) which means some people are getting serious about paying down credit card debt.

Slaying the Beast

So how can you join the ranks of those freeing themselves from credit card debt? Financial analysts recommend some of these strategies:

• Target your budget: Many people who find themselves in serious credit card debt got there by ignoring their real monthly limitations and capabilities. In order to get serious about eliminating your debt, you need to know exactly how much money is coming in and going out of your house each month (in the form of bills, mortgage or rent, food, entertainment, and anything else you spend on). You may want to get right down to paying off your debt, but you can’t make a realistic plan until you know how much money you have leftover each month to put toward debt payment.
• Consider the snowball: If you’ve done some research about debt elimination strategies, you’ve probably heard of the debt snowball, which involves making minimum payments on all credit cards and funneling any extra money (as determined by your budget) to the balance of the card with the highest interest rate. If you’re a hard logic-and-numbers kind of person, this method will likely work well, because it’s the least expensive way, in the long run, to eliminate your debt.
• Or start with the smallest: On the other hand, some people prefer to start funneling extra money to the credit card with the lowest total balance, which allows them to eliminate entire card debts more quickly. This might work better for you if you like small rewards to keep you on track. In the end, it might cost a few more dollars than the snowball method, but if it helps keep you motivated to pay down your debt, it’s probably worth it.
• Find out where you really stand: If thinking about your debt overwhelms you, it may be difficult to understand objectively. To get a concrete idea of where you stand financially, try using this debt calculator to determine exactly how bad (or not so bad) your situation is.
• Know the benefits of bankruptcy: If you do the above calculations and realize you’re in over your head financially even if you juggle your money a bit, don’t be afraid to consider filing bankruptcy. Bankruptcy protection exists for a reason, and, for some people, it’s the only realistic solution to serious debt. A bankruptcy lawyer near you can help you determine whether bankruptcy is a realistic solution to your problems.

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