People are carrying more consumer debt now than ever before and signs of that burden are showing up in the form of debt fatigue. If you're being buried under payments, the only real solution is to change your debt habits and start digging your way out, one step at a time. So roll up your sleeves and grab that shovel.

1. Facing the Music

If you've been trying to make bills vanish by throwing them away unopened, the first step is to own up to your mistakes. Clear off your kitchen table and get out all your loan statements, bills and budget - basically everything you can think of that relates to your finances. The loan/credit card payments and the bills for essentials – power, heat, and water, for example – will represent your base payments. If these already exceed your net income, you will either have to change your lifestyle (sell the house, get a small apartment, take on a second job) or file for bankruptcy. Now you need to make a plan.

2. The Pilgrimage of Repayment

Not all debts are created equal. In making your plan, you'll need to establish a hierarchy among your debts and make a plan of attack. Experts say to target the high-interest debt first, non-deductible, low-interest debt next, and tax-deductible debt last. Speaking of high-interest debt, it's time to stop using it. Keep a single credit card for emergencies and quit carrying the rest entirely. Ideally, you should try to save up an emergency fund and lock all your cards away. It is time for a cash diet to help you to stick to your repayment plan.

3. Get the Damage Report

The next step is to check your credit rating and reviewing your credit report for inaccuracies or patterns bad behavior. You can get your credit rating the same way lenders and landlords do – from the credit bureau. Once you have the report, you can check if it's accurate and identify the accounts that are dragging your rating down. It only takes one or two late payments to move a consumer loan from a green rating to a red. If you have late payments on all of your credit accounts, you may find yourself in the "high-risk" category, despite diligently paying the loans down (although not on time). It sounds picky, but banks can afford to be uptight because they have a huge pool of people seeking loans.

A good way to start is by viewing your credit report, which you can do for free once a year. You may also want to see your credit score, which you can also get for free. Keep in mind that not all free credit score services are exactly free; some may insist that you sign on for a credit monitoring service that comes with a monthly charge if you fail to cancel it.

4. Initiate Damage Control

Get rid of troublesome accounts, cancel unnecessary cards and pay down your overall debt on time. Use automatic payments and tighten up your budget to get your debt under control. This will keep your credit rating from getting worse and, over time, will improve it. If your credit rating allows for it, visit the bank and try to get a larger, lower-interest loan and consolidate all your consumer debts into this loan. This will speed up the process of paying off your debt by minimizing the interest drain on your payments.

If your credit score allows it, you may consider a balance transfer offer from one of your credit cards. Such offers may allow you to pay off debt faster by transferring high-interest debt onto a credit card account that comes with a 0% annual percentage rate (APR) and a payment grace period that could last anywhere from six to 18 months depending on the offer. All it costs at the front end is a balance transfer fee that is usually a flat sum or based on the percentage of the amount you transfer (3%-5% is typical). Just keep in mind that if you don't pay off the balance by the time the grace period ends you'll be on the hook for high credit card interest rates.

Similarly, if you have access to a line of credit, you may also be able to tap it to pay off higher interest debt. Lines of credit have annual percentage rates in the mid-single digits, while credit card APRs in the teens to mid-20% range. Be aware that using such a strategy should also come with a close examination of spending habits; using a line of credit to subsidize poor spending habits or to live beyond your means is a decidedly bad practice.

5. Use Two Shovels

Whenever possible, double up on payments on your highest-interest debt. Although it's not quite as efficient as consolidating, doubling up on payments can speed up the payback period. If you've eliminated the high-interest debt, double up payments on the next-highest debt. You'll be consistently increasing the overall rate at which your debt diminishes and getting closer to the magic number the bank is looking for before granting a consolidating loan. Once you get a consolidation loan, doubling payments will make it vanish that much faster.

6. It's My Debt, I'll Do It

Getting out of debt usually means making some painful decisions. If you're simply too far behind, it might be time for some drastic measures. The softest cuts come in the form of substitution – one-ply for two, a walk in the park for a gym membership, a "staycation" over a vacation. Harder cuts come in the form of selling whatever non-essential items you can live without. Any money raised from selling non-essential stuff will provide a lump-sum payment against your highest interest loan. 

7. Many Hands Make Light Work

One wise step in the process of getting out of debt is to meet with a credit counselor, though this is option is much more helpful if you do it before you're desperate. A credit counselor will provide many helpful tips and make sure that you're on the right track with your repayment plans. He or she may also provide support when you meet with your creditors, adding a little bit of professional weight to any negotiating you want to do. That said, be wary of credit specialists who charge high fees while churning through an equally large volume of clients.

8. Renegotiate the Terms

Now it is time to meet your creditors. Go and visit the lending institutions with which you have outstanding debts. If you owe more than one bank, start with the bank that you have the best history with. Set a meeting time and bring your damage report, your new cash-based budget and a humble smile. Explain the steps you've already taken to avoid defaulting on your debts and ask to renegotiate the debt you have at that institution. Now that you've abandoned your loose credit ways and can prove it, banks will be more likely to cut you some slack.

The Bottom Line

You'll be able to climb out of most financial holes by following the steps we've outlined here. For some, getting buried in debt and having to dig their way out is enough to turn them off carelessly piling up more debt in the future, but solid personal finances are the only buttress against future problems. If you can't dig yourself out, you may have to declare bankruptcy, which can ruin your credit rating and make you ineligible for loans or credit for years.

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