Steps to Take If You’re Struggling With Multiple Debts (2025)

Multiple debts can quickly pile up and leave you feeling overwhelmed, unsure of where to start or how to make progress. If you’re staring at a stack of bills and wondering how you’ll dig your way out, you’re far from alone. In 2025, the average American household carries over $101,000 in debt, and over 60% of adults report feeling burdened by what they owe. Whether it’s credit cards, student loans, medical bills, or personal loans, juggling multiple debts can feel like a never-ending uphill battle. The good news? No matter how deep the hole feels, there are proven steps you can take to regain control, lower your stress, and start making real progress.

This guide walks you through each step—practically, honestly, and with encouragement—so you can move from overwhelmed to empowered.

Assess Your Debt Situation

Before you can fix a problem, you need to see it. Many avoid looking at their debt because it’s stressful or embarrassing. But facing the numbers is the first and most important step toward freedom.

List and Organize All Debts

Begin by gathering every bill, statement, and collection notice. Don’t leave anything out, even if it’s a small balance or a debt you’re disputing. Write down:

The name of each creditor or lender
The total balance for each debt
The interest rate (APR)
The minimum monthly payment
The payment due date

You can use a spreadsheet, a notebook, or a debt tracking app—whatever helps you see the big picture. If you’re more visual, try color-coding your debts by urgency or interest rate. This list is your “debt dashboard.” It might be scary initially, but seeing everything in one place is empowering. It gives you a starting point and helps you plan your next moves.

Understand Your Credit Standing

Your credit report is a snapshot of your financial life. It shows not just your debts, but also your payment history, credit utilization, and any accounts in collections or charged off. Get your free credit report from each of the three major bureaus (Equifax, Experian, TransUnion)—you’re entitled to one free report from each every year, and many services (like Beem) offer ongoing monitoring.

Look for:

Any debts that have gone to collections or been charged off
Errors or outdated information that could be hurting your score
Your current credit score, which will impact your options for consolidation or new credit

If you spot errors, dispute them right away. Fixing mistakes can boost your score, making it easier to qualify for better rates or consolidation loans.

Create a Realistic Budget and Repayment Plan

A budget isn’t about deprivation—it’s about clarity and control. It helps you see where your money is going and how much you can realistically put toward your debts.

Track Income and Essential Expenses

Start by listing all sources of income, after taxes. Then, write down your fixed monthly expenses: rent or mortgage, utilities, insurance, groceries, transportation, and minimum debt payments. Don’t forget irregular expenses like annual subscriptions or quarterly bills—divide these by 12 and add to your monthly budget.

Once you subtract your expenses from your income, you’ll see what’s left for extra debt payments or savings. If your expenses exceed your income, it’s time to look for places to cut back—subscriptions, dining out, unused memberships, or impulse purchases. Even small changes can add up over time.

Prioritize Debts

Not all debts are created equal. Missing a mortgage or car payment can lead to foreclosure or repossession, while missing a credit card payment will hurt your credit, not your housing or transportation. Prioritize “must-pay” bills first.

For unsecured debts (like credit cards and personal loans), choose a repayment strategy:

Avalanche Method: Pay off the highest-interest debt first. This saves the most money over time and shortens your payoff period.
Snowball Method: Pay off the smallest balance first. This gives you quick wins and motivation to keep going.

Both methods work—pick the one that fits your personality and keeps you motivated. Set realistic goals, like paying off a single card in six months or reducing your total balances by 10% this year. Celebrate small victories to keep your spirits up.

Explore Debt Relief and Consolidation Options

If you struggle to keep up with multiple payments, debt relief or consolidation can simplify your life and save you money.

Debt Consolidation Loans

Debt consolidation means rolling several debts into one new loan with a single monthly payment—often at a lower interest rate. This can be done through:

Personal loans from banks, credit unions, or online lenders like SoFi, Marcus, or Upgrade
Balance transfer credit cards with a 0% introductory APR (watch for transfer fees and the end of the promo period)
Home equity loans or lines of credit (only if you’re comfortable using your home as collateral)

Benefits include:

Simplified payments (one due date, one payment)
Potentially lower interest rates
A clear payoff timeline

But be careful: you’ll need to qualify based on your credit score and income, and you must avoid racking up new debt on paid-off cards. Otherwise, you could end up deeper in debt than before.

Debt Management Plans

A debt management plan (DMP) is set up through a nonprofit credit counseling agency. They’ll negotiate with your creditors for lower interest rates and combine your unsecured debts into a single monthly payment, usually paid over three to five years. You make one payment to the agency, and they distribute it to your creditors.

DMPs can help you avoid collections and late fees, often resulting in faster payoff. However, you’ll need to close your credit card accounts while on the plan and stick to the payment schedule.

Debt Settlement and Bankruptcy

Debt settlement involves negotiating with creditors to pay less than you owe, usually in a lump sum. This can damage your credit and have tax consequences, so it’s best used as a last resort. Bankruptcy is a legal process that can discharge many debts but has serious long-term effects on your credit and should only be considered after exploring all other options.

If considering these options, consult a reputable credit counselor or bankruptcy attorney first. They can help you understand the risks and benefits for your unique situation.

Communicate With Creditors

If you’re struggling, don’t wait for the phone to start ringing—contact your creditors before you miss a payment.

Negotiate for Better Terms

Call your lenders and explain your situation. Be honest and respectful. If you’re proactive, many creditors offer hardship programs, temporary payment reductions, or even lower interest rates. When negotiating:

Ask for payment extensions, reduced interest rates, or waived fees
Offer a realistic payment plan you can stick to
Document every conversation and get all agreements in writing

Staying in touch shows you’re serious about repaying your debts and can help you avoid collections or legal action.

Pro Tip: If you’re nervous about calling, write a script or practice with a friend. Remember, creditors would rather work with you than send your debt to collections.

Avoid Common Pitfalls

When you’re under financial stress, making decisions that backfire is easy. Watch out for these traps:

Don’t Take on New Debt

Opening a new card or loan to pay off existing balances might be tempting, but this often leads to a debt spiral. Only use consolidation if you have a clear plan to avoid new borrowing.

Don’t Ignore Bills or Collectors

Ignoring bills will not make them go away—it can lead to late fees, collections, lawsuits, or wage garnishment. Always respond to notices and keep communication lines open.

Beware of Scams

Be wary of any company that charges upfront fees, promises to “erase” your debt, or guarantees results that sound too good. Stick with reputable lenders, nonprofit agencies, and official resources.

Red Flags:

Demands for payment before services are provided
Pressure to act immediately
Guarantees to “fix” your credit or eliminate debt overnight

Read related blog: How Much Does a Debt Settlement Lawyer Cost

Seek Professional Help if Needed

If your debts feel unmanageable, don’t hesitate to ask for help.

Credit Counseling

A certified, nonprofit credit counselor can review your finances, help you create a budget, and recommend the best repayment strategy. They can also set up a debt management plan and negotiate with creditors on your behalf.

Look for agencies accredited by the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA). Avoid any organization that charges high upfront fees or makes unrealistic promises.

Legal and Financial Advice

If you’re considering bankruptcy or facing legal action from creditors, consult a bankruptcy attorney or financial advisor. They can help you understand your rights and options.

Tip: Many legal aid organizations offer free or low-cost consultations for those in financial distress.

Monitor Your Progress and Adjust as Needed

Getting out of debt is a marathon, not a sprint. Stay engaged and celebrate your wins along the way.

Track Payments and Celebrate Milestones

Use budgeting tools, spreadsheets, or apps like Beem to monitor your balances, payment history, and credit score. Mark each debt as you pay it off, and reward yourself for reaching key milestones—make sure your reward doesn’t involve more spending!

Adjust Your Plan as Life Changes

If your income goes up, put extra money toward debt. If you hit a setback, revisit your budget and adjust your plan. Flexibility is key to staying on track for the long haul.

Build Financial Habits for the Future

Once you’re on the path to being debt-free, think about how you can avoid falling back into old patterns. Build an emergency fund, continue tracking your spending, and set new financial goals—like saving for a home, retirement, or a dream vacation. The habits you build now will serve you for life.

Additional Tips for Managing Multiple Debts

Automate Payments: Set up automatic payments for at least the minimum due on each account to avoid late fees and credit score dings.
Review Statements Regularly: Read every statement to catch errors, fraudulent charges, or unexpected fees early.
Limit Credit Card Use: Use cash or debit cards for everyday purchases while paying down debt.
Find Extra Income: Consider a side gig, selling unused items, or freelancing to bring in extra cash for debt payments.
Stay Motivated: Join online debt support groups or forums. Sharing your journey and hearing others’ stories can keep you inspired.

Conclusion

Struggling with multiple debts can feel overwhelming, but you’re not powerless. By getting organized, creating a realistic plan, exploring consolidation or relief options, and communicating with creditors, you can take control of your finances—one step at a time. Remember, you don’t have to do it alone: nonprofit counselors, reputable lenders, and tools like Beem help you track your progress and find the best solutions. Download the app now!

The journey to debt freedom may take time, but every payment, every phone call, and every small victory brings you closer to financial peace of mind. Start today, stay committed, and know that a debt-free future is within reach.

Steps to Take If You’re Struggling With Multiple Debts

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