Ultimate guide to getting out of over-indebtedness in 12 months
💡 Quick Tip
A radical one-year action plan to completely clean up your finances. Learn to apply surgical cuts to daily expenses, generate shock income, and renegotiate with creditors to get out of the debt hole in record time.
Acceptance and initial diagnosis
To get out of a hole, first stop digging. This 12-month plan requires military discipline. Start by canceling all credit cards and deleting your payment data from online stores.
Phase 1: Radical Cut (Months 1 to 3)
Maximize cash flow.
- Survival audit: Cancel all leisure subscriptions. Switch to store brands.
- The envelope method: Take out food money in cash. When it is empty, that is it.
- Crisis fund: Save €500 quickly to avoid borrowing if something breaks.
Phase 2: Shock Income (Months 4 to 8)
You cannot exit a large debt just by saving; you must earn more.
- Massive sale: Sell branded clothes or old tech.
- Temporary extra work: Do overtime or weekend jobs. 100% goes to debt.
Phase 3: Final Attack (Months 9 to 12)
Apply the Avalanche or Snowball method. Call banks to negotiate interest cuts in exchange for total settlements.
📊 Practical Example
Practical example with real numbers
You have a credit card debt of €3,000 at 20% interest. Your salary is €1,400.
- Months 1-3: You cut subscriptions and dining out, freeing €150 extra/month.
- Months 4-8: You sell items (€300) and work weekends for €200 extra/month.
You now have your minimum payment (e.g., €100) + €150 + €200 = €450 monthly for debt.
By month 8, you have contributed €3,600 (including the €300 sale), covering principal and interest. In less than a year, you annihilated a €3,000 debt that would have taken 6 years paying the minimum.
