When you are drowning in debt you may start to feel panicky. Late payments are piling up and the total amount that you owe is going up every month despite the payments you make. If you are thinking about bankruptcy wait! You may be able to get yourself out of this hole with a change in lifestyle, a strict budget and possibly debt consolidation.

If you are thousands in debt and sinking fast don't wait. You must act now. The first step is to know what you owe. Many of us stop looking at our statements because it is too hard to face the raising balances. You will never get out of debt unless you know how deep you have gotten yourself in.

The next step is to check your interest rates. You need to know the interest rates on all of your credit cards and loans. This includes your car loans, mortgage and student loans. You need to know your interest rates in order to know which line of debt is hurting you the most.

Now that you know where you stand you need to sell the things you do not NEED and pay down your most detrimental debt. If you bought a big screen TV on a credit card with 20% interest, sell the TV and pay off some of that card. No item is worth that kind of interest. If you have a very high car payment with a high interest loan, sell the car and get a more affordable car that you can buy outright or pay off quickly.

After you have sold off some of your unnecessary purchases it is the time to think about debt consolidation. You must calculate the time it will take to pay off your debts, the interest you are charged each month and your monthly payments. You must then look into debt consolidation. You do not want to simply save yourself money each month; you want to pay off your debt as quickly as possible.

If debt consolidation can lower your interest rates and help you pay off your debt more quickly then it is probably going to be a good idea to consolidate. If you can consolidate and if it will lengthen the time pay the debt off, do not consolidate. You want the debt paid off as quickly as you can.

However you got here, you can get yourself out. You just need to commit to do whatever it takes. When you are in over your head the idea of being debt free seems like a distant memory or a dream that cannot come true. Don't give into these negative thoughts. Just take it one day at a time and before you know it, you will be out of debt and saving for your children's college education.