I watched a man drop from $2.2 million in debt to zero debt in less than ten years. Here's how he did it.
1) He sold his most leveraged properties eliminating $1.7 million in debt. He took a loss and even paid taxes from the proceeds of the sale on one property in order to get out from under the debt. His cash flow actually improved.
2) He bought properties that were much smaller, but not leveraged. Remarkably, the spendable income produced was about the same, although some other benefits of having leveraged property were lost.
3) He next attacked the smallest, highest interest loans until they were paid for. The money he no longer had to put against these loans was redirected against other loans.
4) Once a few of these loans were paid in full, then he took small loans out on his Home Equity Loan at 3% interest to pay off other loans that were paying 6% interest or higher. This strategy quickly improved his cash flow and paid off the other loans faster. He would, for instance, take out a $5k home equity loan and apply 100% of that money to principal on his 1st mortgage that was at 6% interest. Then he would work hard to pay off the $5k loan. Then he would repeat this again and again and again until the 1st mortgage and the home equity loan were 100% paid off. He paid a fraction of the interest he would have otherwise paid. It took discipline to do this, but it improved his cash flow when the loans were finally paid off. This only took a few years, not the 30-years he had signed up for originally on his 1st mortgage. (see also: https://www.area-info.net/articles/show.php?cty=Providence&st=Utah&article_id=825)
5) Once his cars were paid off he simply kept driving them without car payments. He used the money he had been applying to car payments to apply towards principal on his 1st mortgage and his home equity loans. Today he still drives one of those cars. It's now over 12 years old and going strong. He says he will drive that car until it won't run any longer or until he can't get parts. He expects to drive it for at least 10 more years. The money he'll save on car payments over that time will equal about $72,000. That money will be invested for retirement. He doesn't mind driving an old car. "Who was I trying to impress anyway?", he asked, "Why do we spend money we don't have to buy things we don't need to impress people we don't know?"
It is possible, with the right plan, some discipline, and a steady income to get completely out of debt. The man I'm describing reached a point where he had no mortgages of any kind, no credit card debt, and no other debt of any kind. Yet, he still owned income property, his home, some stock, and his cars.
If you start planning your debt reduction actions, and follow up by acting on your plan, you can probably get completely out of debt sooner than you think. It's a wonderful thing to live without debt. You can do it. Consider sending this article to ten of your friends who are still living with debt. Let's get Americans out of debt.
See also: https://www.area-info.net/articles/show.php?cty=Providence&st=Utah&article_id=827