how to get out of debt
Updated August 14, 2022

How to Get Out of Debt with No Money: The Ultimate Guide 

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It cannot be easy to admit that you owe more than you can pay and look for advice on how to get out of debt. Unfortunately, more and more Americans find themselves in this situation and need a get-out-of-debt plan.

Before the Bankruptcy Protection Act of 2005, things were simpler. You could file for bankruptcy and start fresh. The Act made it difficult, even impossible to file for bankruptcy for most, leaving them to suffocate under the burden of:

  • Student loans
  • Credit card balance
  • Unexpected medical bills
  • Growing mortgage rates

More and more Americans are looking for advice on how to get out of debt, and, judging by statistics, their number will likely increase.

Consumer Debt Stats or the Increasing Need for a Get-Out-of-Debt-Plan

According to the Federal Reserve, U.S. consumer debt is at its highest levels ever. In December 2018, it reached a new record, at $4.010 trillion, out of which $1.045 trillion in revolving credit (credit card debt), and $2.965 trillion in non-revolving /survecredit (fixed-payment loans).

The predominant sources of debt for consumers in 2018 were mortgages and credit cards. In 2017, 53% of Americans saw mortgage debt as a good thing and only 36.4% managed to pay of their balance every month. In 2018, 33% of Americans owed between $5,000 and $25,000 while 14% owed more than $100,000.

Judging by these stats, you have no reason to feel embarrassed that you’re looking for advice on how to get out of debt. There are millions like you out there, and many more will probably end up in the same situation. The good news is that there are solutions for situations like yours.

Pro tip: It is possible to get out of debt even when you have no job and no income or when the income you make barely allows you to survive, leaving nothing for debt paying.

If you have some income, in the following lines you will learn how to get out of debt quickly. If you have no income, it may take a little longer, but what matters is that you’ll learn how to get out of debt with no money and bad credit.

How to Get Out of Debt No Matter How Difficult Your Situation Is

Before we get to the actual steps, there is one thing I want to clarify. The following tips will only work if you discipline your spending habits. You will learn how to earn and save the money you need and how to manage your money more effectively in order to get out of debt.

However, if you spend every dollar you make instead of using it to pay off your outstanding bills and credit cards, your debt will just keep growing. Also, the tips below will only work if you follow them all. If you’re reading this, your situation is not exactly great, and you need to work hard to improve it, on several fronts at the same time.

Therefore, prepare yourself mentally and learn to consider the following advice as an opportunity to change your life for the better. For now, your priority is to learn how to get out of debt. Later on, you can set new goals, like an unforgettable vacation with your loved one, a new car, some home renovation projects, or earning six figures.

You can do anything you set your mind to, but it takes hard work, perseverance, and discipline. It takes commitment to your goals, no matter what these are. For now, let’s get back to our task at hand, namely teaching you how to get out of debt when you are broke and you have bad credit.

Here is what you need to do:

1. Assess Your Financial Situation and Prioritize Your Debts

You know your debts, I have no doubt about that. However, it is time you had them all in one place, organized by amounts, APR, and importance.

You can write them down on paper, type them in a spreadsheet on your computer, or use an app to centralize them. Don’t forget to take into account the interest and the consequences of not paying. Not paying the minimum amounts on your credit cards could get you penalties but some penalties are preferable to losing your home due to foreclosure or having your car taken back by the leasing company.

I’ve found Tally incredibly useful at managing debt. Tally is an app you download and use for free. It lets you register your credit cards and monitors balances, APRs, and due dates.

It tells you which ones to pay first. If you qualify, you may benefit from a credit line with low APR and use that to pay off high APR credit cards and avoid late penalties.

Pro tip: Even if you don’t qualify for the credit line, you can still benefit from having all your credit cards in one place and seeing which debts are more urgent.

2. Try Renegotiating Some of Your Debts

Now you know how much money you owe and to whom. Depending on the nature of your debts, it may be possible to renegotiate their terms.

For example:

  • If you have some equity in your home, you may be able to borrow against it and pay off credit card debt.
  • Some credit cards can be turned into personal loans with lower APR.
  • Some lenders will allow you to extend your loan period and thus lower your installments.

You have nothing to lose, and reaching out to your creditors for help and support is better than letting debt and penalties pile up and having creditors knock on your door.

Depending on your situation, you may also benefit from using services like those available through DebtGenius. They are debt relief specialists who will analyze your financial situation, propose solutions to get you out of trouble and give you a savings estimate for free.

Good to know: If you like DebtGenius experts’ proposal, you can hire them to negotiate with your creditors, get you tax exemptions, and more. If not, you’ll at least know where you stand and gain a new perspective on how to get out of debt.

3. Track Your Expenses and Income and Find Savings Opportunities

Are you looking for advice on how to get out of debt with no money or is the money you earn insufficient to pay your debts? Either way, it helps to keep a list of your living expenses, to see where the little money you have is going.

As you do it, ask yourself how you could reduce your expenses even more. Here are a few ideas:

Basic Advice on Lowering Your Bills

In my experience, you can save a great deal of money on your utility bills. Sure, it won’t happen overnight, but, at the end of the month, you’ll have more money left to pay out your debts. Here is what you can do:

  • Turn off the lights and your appliances when you’re not using them
  • Use the water-saving programs on your washers
  • Use apps that reward responsible use of electricity
  • Negotiate lower bills
  • Cancel subscriptions on services and features you don’t need and use

I know you hate calling and dealing with the customer service representatives of your utility providers. You call them to lower your bills and they try to persuade you to upgrade to more expensive plans.

Well, I’ve found ways to avoid dealing with them myself and save money. One of them is Cushion, an app that scans your credit and debit card transactions looking for savings opportunities, cancels your subscriptions, and negotiates lower bills with your utility providers.

Another option is BillShark. Both Cushion and BillShark will charge you a percentage of the money they save you but it should be worth it, considering that they do everything and you just enjoy the benefits.

Pro tip: If you feel you’re paying too much on your phone bill even after negotiations, perhaps you should look into Wi-Fi calls via a service such as Republic Wireless.

4. Get Some of the Stuff You Need for Free

There are many items that you need and pay for in order to get by in your everyday life. Well, I think getting them for free is a great way to get out of debt. You are basically redirecting the money you would spend on those items towards your debts, and you still get what you need.

Of course, in order to obtain the things you need for free you have to know where to look for them but that is where we come in. From free food and drinks to baby stuff, cosmetic products samples, and even free cell phones, there are many things you can get for free and save money. Check out our list of 41 best freebies available and where to find them.

5. Monitor and Improve Your Credit Score

Do you know the difference between learning how to get out of debt with no money and bad credit, and learning how to get out of debt when you are broke but you have a good credit score? It’s huge.

Your credit score is considered a mirror of who you are not only as a borrower but also as a potential employee, tenant, etc. People look at it and think they know everything about how well-organized, calculated, or reliable you are.

Well, I think you should take control of how people see you. Get a glimpse of your current image and find ways to improve it, bit by bit, step by step. I use CreditSesame to monitor my credit score. It’s free and very easy to use and understand.

With it, you will learn:

  • What affects your credit score and how to improve it
  • How to use your credit score in order to get the best terms on the products and services you need
  • If changes to your credit score are made and someone is using your ID

Another viable option is CreditKarma, also free.

Pro tip: You’ve got nothing to lose by testing a credit score monitoring app, but if you manage to improve your credit score, you could get access to better terms on loans and credit cards.

6. Learn All There Is to Know about Your Credit Cards and Make the Most of Them

I bet much of your debt comes from credit cards and you pay most of your shopping with credit cards. But are you sure you are using them to their full potential? Every credit card has some costs and benefits. In the desperate situation you’re in, you should know those by heart and take advantage.

I need you to draw a comparison chart. List your credit cards, their APR, grace period late, cash advance and transfer fees, and, of course, their perks.

Your obvious goal is to avoid paying fees and exploit credit card perks. You may be able to pay off your balance on one credit card temporarily, to avoid exceeding the grace period and interest payments.

Pro tip: Another credit card could get you extended warranty on some products, cashback on certain purchase categories, price protection on others, and more. The least you can do is find out and determine which credit cards are worth using and paying off and which can wait.

7. Change the Way You Do Your Shopping

We live in a consumers’ society and it’s driving us to bankruptcy. I’m not going to tell you how to spend your money, as I’m sure you can figure out what expenses are unnecessary by yourself.

However, I can tell you for sure that you can save huge amounts of money with a few simple tricks, and any money you save on your groceries and other living expenses is money you can use to pay out your debts.

Here are some of the tricks I was telling you about:

Use browser extensions that help you find the best prices, coupons, and discount codes

For example, Avast SafePrice and Honey don’t cost anything and you can use them at the same time. The former helps you find the best price for the products you’re interested in, and the latter helps you locate and try coupons and discount codes to lower prices even more.

Not free, but certainly worth using, ButterflySaves will give you coupons and ecodes that allow you to save up to 50% on your purchases at major retailers, like Walmart and Target.

Use cashback websites and apps

They are numerous, easy to find and use, and an excellent alternative to save money. I encourage you to do your research and find the ones that pay the most.

In my experience, Rakuten (formerly Ebates), Dosh, Affinityy, and SavingStar are great for online shopping.

For brick-and-mortar shopping, you cannot go wrong with Ibotta, Drop, and Shopkick.

You’ll want to use GetUpside when fueling up your car, and Sweatcoin when you’re exercising to get paid for your steps.

Good to know: There are numerous cash back apps and websites you can use. Some will work better than others but the bottom line is that you can save big money using them, and, as explained above, every dollar you save is another dollar to finance your get-out-of-debt plan.

8. Turn Your Clutter into Cash

Do you really need all those things lying around in your home and dressings? I doubt it.

Perhaps you kept them because they are still functional and you couldn’t find it in your heart to part with them. You may have hoped they would prove useful or serve their purpose later on. Well, it’s time to turn them into cash and fast.

How do you do that? It depends on the specifics of the things you have available but here are a few ideas:

  • Sell any appliances, electronics, books, tech, and gadgets to Decluttr
  • Look up consignment stores that might be interested in the stuff you have
  • List your stuff for sale online with Facebook Marketplace, Craigslist, etc.
  • Organize a garage sale or lookup ways to sell your clothes, furniture, and any other items you can spare
  • Recycle – I’ve seen some great garden accessories made from used tires, old furniture, plastic bottles, and more, so lookup DIY tutorials and give your old stuff a new life.

Pro tip: Selling the stuff you no longer need is a great idea to earn some money but it will also help you clear some space in your home and airy and clean homes look and feel better and are easier to maintain.

9. Use Your Free Time More Productively

What do you in your spare time? Do you browse the web, play games, or go out for walks?

Did you know that some apps pay you for doing this stuff? Here are a few examples:

  • With Long Game and Mistplay you can earn money by playing games on your phone
  • HealthyWage and SweatCoin pay you for losing weight and, respectively, staying in shape
  • InboxDollars and Swagbucks pay you for visiting various websites, watching videos, and many other interesting and fun online activities
  • SurveyJunkie, Nielsen Computer & Mobile Survey, and Vindale Research will pay to get your opinion on various topics
  • S’more pays you just to keep it installed and let it run and play screensaver ads

And if online surfing is not exactly your hobbies, perhaps you can find a way to turn your hobby into cash.

10. Use Your Home and Car to Earn More Money

Your home and your car cost you a lot of money, so it seems only fair to use them to earn at least some of that money back. How can you do that?

There are three infallible ways:

I’ve been using Airbnb to find accommodation during my trips for a long time. One of my hosts once told me that, when they started, they used to sleep in the garage and rent out their bedroom.

It must have been worth it because, by the time I became their guest a couple of years later, they had turned their home into a luxurious mansion and they said their guest hosting business was their only income source.

As for driving for Uber or Lyft, you probably already know the basics. It will take a little time and trouble to get accepted, but once you do, you can start making money even on your way to and from work and when running errands.

Pro tip: Lyft is a great source of income for drivers. If you sign up using this link, you’ll earn a $300 bonus once you’ve completed your first 100 rides.

11. Start Earning (More) Money

I don’t know you, and I wouldn’t want to make false assumptions. However, I’d say that one of the reasons why you ended up looking for advice on how to get out of debt is that you aren’t making enough money.

If you did, you would have paid your credit card balance, mortgage, and bills, I’m sure. Therefore, I believe that an infallible way to get out of debt is to earn more money.

If you already have a job, there are small things you and your loved ones can do to earn more money. If you’re unemployed, there are many more opportunities out there, and we’ll explore them in the following lines.

Money-Making Ideas You Should Try Right Now

  • Walk dogs – It may seem difficult to find well-paying clients but your problem will be solved if you register with Rover.
  • Babysit – If you’re great with kids, perhaps you could make money watching them and caring for them. UrbanSitter is an excellent solution to find babysitting jobs in your area.
  • Sell cosmetics – You’ve surely heard of Avon, and there are many more cosmetic companies that will pay you a commission of up to 50% to sell their products.
  • Flip products for profit – If you have an eye for great deals, you can buy products cheap from thrift and consignment stores and sell them for profit. Our list of 31 things suitable for thrift store flipping could be a good starting point.
  • Tutor others online – You surely have something you’re really good at, so why not use your knowledge and skills to earn money. You can tutor others online, either live or through video or written guides.

If you have yet to find an idea to your liking, check out our list of 100+ money-making ideas here and one will surely appeal to you!

These ideas should help you make money fast and pay out some of your debts. As the money starts flowing, you will be tempted to spend more and postpone paying your debts. That is the worst thing you can do, which brings us to the most important step and the highlight of this post.

12. Pay Off Your Debts and Avoid Falling into the Debt Trap Again

Debts are like snowballs. The more you roll them and postpone them, the bigger and the more difficult to pay off they get. Therefore, I strongly recommend, I urge you, when the money starts flowing, focus on paying off your debt!

Have you heard of horse goggles? They are some small leather patches used on horses that draw wagons and chariots, to prevent them from getting distracted by traffic or animals.

With them on, the horse can only see the road in front. When people tell someone they’re wearing horse goggles, it is intended as an insult, meaning that they have narrow views when they should think outside the box.

Well, you shouldn’t think outside the box when it comes to spending your money. You should wish for a pair of horse goggles or create one with your mind’s eye so that you can focus on the debt alone and pay it off.

Once you have, your financial worries will be gone. You’ll be free to spend the money you earn anyway you like. But you can’t spend what you don’t have, right, so I’m thinking you should find a way to earn even more money and think long term this time.

13. Don’t Neglect Your Taxes

I hate taxes. Paying for money I make by myself, through my own efforts and sacrifice somehow doesn’t seem right. However, we live in society, following rules and laws that say we have to pay taxes. These are debts, and your efforts of learning how to get out of debt should cover them as well.

As mentioned above, apps like Cushion may help you with tax exemptions and liens and lower your debt.  However, they won’t work miracles, and as you start earning money, you’ll owe more, unless you turn to tax deductions and maximize your tax refunds.

It’s in your best interest to become a tax guru, but don’t worry, as it’s easier than you’d think. First of all, you need to learn all about tax deductions, those expenses you can deduct from your income and thus pay less.

Once you know your goal, to deduct all acceptable expenses, you need to learn how to file your taxes for free. I know it’s easier to work with a CPA but you can’t afford that, at least not until you get out of debt.

As you file your taxes, don’t forget to focus on getting the largest tax refund possible. You could recover a considerable amount from the taxes you already paid and use it to pay out other debts, so it’s important.

Pro tip: Apps such as Hurdlr are very helpful and effective. Ever since I started using it, I can’t conceive filing taxes without it, and I know many taxpayers who feel the same. It’s simply the easiest way to track expenses, make sure you claim all tax deductions and get a large tax refund.

14. Start Your Own Money-Making Business

When you’re broke and burdened by debt, walking dogs, babysitting, and other similar gigs are lifesavers. However, as you relieve some of the burden, you start yearning for more.

You want to go out more, trade thrift store clothes for designer clothes, go on vacations, get a new car, and do stuff you didn’t even dream about before. Your current income is not enough to support these, and, as if craving what you can’t afford were not enough, you start getting tired of doing the same thing over and over again.

It is easy to fall into the debt trap again and find yourself looking for ideas on how to get out of debt. To avoid that, I suggest that you start thinking long term when you have your debt in check.

You should start your own money-making business and invest your time and energy in turning it profitable and helping it grow.

If you choose something you like and you play your cards right, slowly but surely, you should be able to turn all your dreams come true, even that of becoming a millionaire. Here are a few ideas that are easy to put into practice and do not require high initial investments.

Easy and Cheap Money-Making Business Ideas

    • Start a local service business – From accounting to roofing, cleaning, constructions, babysitting, caregiving, interior design, and basically any service you know you can provide, there are no limits to what you can do and how much money you can earn.
    • Start a dropshipping business – You may not have a lot of money on your hands, but you surely know a few places to find cheap quality stuff that you can resell. All you have to do is create an online store where to promote those products and intermediate sales.
    • Become an affiliate – Affiliate marketing is fun and easy to make money with. You simply recommend the products and companies you like and cash a commission. Amazon has one of the most profitable affiliate programs. We have been doing it successfully for years, and there’s a lot of money to be made by sharing your knowledge and experience with various products.
    • Become a freelancer – If you like working online, from your home, perhaps you can offer your services as a virtual assistant, graphic designer, writer, etc. All you have to do is join some freelancing or work-from-home platforms, create a great profile, and get a couple of clients. You’ll have a profitable business doing what you know and like best.
  • Start a blog or vlog – We make most of our income blogging, and we know you can do it too. There are numerous ways to monetize a blog, and you have the freedom to choose a niche you’re passionate about. If you prefer speaking in front of a camera to write, then vlogging is for you.

Bonus tip: There are many more businesses you can start with a low initial investment. For our top tips and recommendations, check out this article on how you can start a business without money and our complete guide to starting a money-making business.

15. Make Small and Safe Investments and Develop Healthy Money Habits

No matter how fast you implement the above advice on how to get out of debt and how successful are at it, the time will come when you want and need more money.

That is when you’re most tempted to borrow or abuse your credit cards. You shouldn’t do that, and I’ve found that the best way to avoid mistakes is to anticipate and be prepared.

Judging by your debt-burdened past, you cannot be expected to budget and set money aside on your own, but what if it were possible to do this automatically, without feeling it from a financial point of view?

We live in the age of technology, so it seems only fair to turn to technology for everything we need. I recommend Digit for planning and saving for major expenses. Worthy Bonds will round your payments and invest the change. With Blooom, you can help your 401k account grow.

Pro tip: Contrary to what you may be tempted to believe, investing is not an exclusive right of the rich. You can do it too, and in this article we explain all the steps you should follow to get started.

Final Advice on How to Get out of Debt

I know that many of the suggestions above on how to get out of debt when you’re broke seem hard to put into practice. That’s only because you are overwhelmed by worries and taught that owing money is shameful. I’d say it’s part of life.

The fact that you now owe money means nothing compared to your ability to rise from the ground and pursue your get-out-of-debt plan. So my advice to you is simple: toughen up, follow the tips and tricks above, and build your way to financial stability!

You may grow some grey hairs, spend a few white nights, and feel ready to give up and give in to desperation. However, if you stay at it, you will learn not only how to get out of debt, but also how to build a safe, financially stable future for you and your loved ones.

As you start putting the above advice into practice, share your progress and ideas in a comment below! Let us know which of the above ideas on how to get out of debt worked for you and which didn’t, and don’t hesitate to make further recommendations!


Logan Allec, CPA

Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.

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