How do you pay off debt when you have no extra money? We dug into real forum discussions and found practical strategies to help you overcome financial struggles.
I’ve been reading through financial forums lately, looking for practical solutions to help one of my clients at ASAP Credit Repair. His situation is all too common, he and his wife both work, yet they still struggle to make ends meet and have nothing left for debt payments. It’s a frustrating cycle that many hardworking families face.
After diving into community discussions, I’ve gathered some of the most practical strategies for paying off debt when you have no extra money.
The goal is to help you make progress on your debt even when money is tight, so you can break free from financial stress and build a more stable future.
Effective ways to get out of debt when broke
You have debt. You have no money. What do you do?
This is the question that keeps people up at night. It makes you avoid calls and ignore mail. But the good news is many people have found a way out. Real people on Reddit shared how they paid off debt even when they were broke. Their advice isn’t fancy or complicated — but it works.
One story stood out to me. A Reddit user had about $10,000 in debt across five accounts from 2016 to 2020. Medical bills, credit cards, and loans, it all added up. They had been living paycheck to paycheck for years and never seemed to get ahead.
Sound familiar? So, this person asked, “What’s the best way to deal with debt when you have no money?”
They wrote:
“It feels like I can’t catch a break. Every time I save a little, something big comes up — car repairs, moving costs, you name it. Now I finally have some savings, and I just want this debt gone so I can start fresh. I haven’t been answering calls, and I don’t know where or how to start.”
Their story struck a chord with many. The replies weren’t random tips — they were real, practical steps from people who had been there and made it out.
So if you’re wondering how to pay off debt with just a little in your pocket, here’s how.
Understand Your Debt Situation vs Your Income
Start by listing all your debts — the amounts, minimum payments, and interest rates. Knowing exactly what you owe is the first step toward taking control.
Then, look at your income. Can you cover basic living expenses and still pay something toward your debt? This is where many people realize they need to make changes.
Choose whichever tool feels easiest for you. The goal is to see your full financial picture clearly so you can make a realistic plan.
One commenter put it bluntly:
"The conversation is always 'Don't eat out' or 'Cancel this or that.' The truth is, you need more income. Use that extra income to pay off debt. Weekly or twice a week."
They shared real, simple ways to bring in extra money:
- "I'm already doing eBay. Whatever you sell, use it to pay off debt."
- "Sell scrap metal to scrapyards. You'll get cash."
- "What gets thrown away at your job? Ask if you can take it. Sell it or scrap it."
- "Repeat until your debt is gone."
This wasn’t just theory but advice from someone who had been in the trenches and found a way out.
Know Where Your Money Goes: Budgeting and Tracking Expenses
Create a Detailed Budget
"You need to budget your money so you know what every cent goes to."
This sounds boring, but it's the most important step. You can't fix a problem you don't understand.
Track every dollar you spend
"Track every transaction... those $5-10 purchases do add up after a while."
Write down everything. That coffee. That snack. That app you bought. Small amounts add up to big money.
Scrutinize Essential vs. Non-Essential Spending
Ask yourself: Do I really need this? "You have to look at what's essential and what's not."
Be honest. You need food, shelter, and basic clothes. Everything else is a want, not a need.
Remember to prioritize essential expenses first.
Rent, utilities, food, and transportation should always come first.
It’s important to protect your basic needs before paying creditors. If you don’t cover these essentials, you risk falling even deeper into crisis. Once these are secured, you can plan how to tackle your debts.
To help you track everything, here are a few free and easy tools:
Google Sheets or Excel Spreadsheet
Create your own simple budget and debt tracker. You can list debts, interest rates, minimum payments, due dates, and track your progress each month. If you’re not comfortable building a sheet from scratch, you can also use free templates from Google Sheets, Canva or Microsoft to make it easier.
Undebt.it (Free version)
Undebt.it is a web-based tool that helps you organize debts, plan your payoff strategy (like snowball or avalanche), and track payments easily.
EveryDollar (Free version)
A simple, user-friendly budgeting app that helps you track where every dollar goes and plan monthly spending. You can Check out EveryDollar.
Contact Creditors to Negotiate
When you can’t afford your debt payments, many people don’t realize one powerful option: you can negotiate with your creditors.
Ask for lower payments or look into hardship programs. You can also ask about forbearance or reduced interest rates. The key is to be proactive and don’t wait until you’re already behind, or worse, have your account go to collections.
The Power of Negotiation (Most People Don’t Know This)
Several commenters emphasized this point:
"If you can't afford to pay your credit card, you can call and negotiate with them. Credit card companies will often accept a smaller percentage of the debt if you can show financial hardship."
One person added that notes something very important about key timing.
"You should negotiate within six months or more."
Another shared a powerful success story:
"When I got sober, I reduced my $15,800 debt down to $2,900 and turned my life around. The snowball method and Dave Ramsey’s advice helped me get back on track. Not all his investment advice is perfect, but his tips on budgeting and buying big items were life-changing."
How to Do This?
- Call every creditor and ask for discounts or payment plans with no interest.
- If they won’t work with you, consider options like bankruptcy (which can sometimes cost a few hundred dollars but clear thousands in debt).
The worst they can say is no. But often, they'll help if you ask.
Check for old debts
Some debts might be too old to collect. Check your credit report. If a debt is more than 7 years old, it might not matter anymore.
Consider Debt Settlement Carefully
Debt settlement is another option, but it should be a last resort — not your first step.
Debt settlement means negotiating with creditors to pay less than what you owe, usually in one lump sum or a few payments. It might sound appealing, but there are big risks.
When to consider it:
- If you truly can’t pay your debts at all.
- If you’re already behind and facing collections.
- If bankruptcy feels like your only other option.
Risks to your credit score:
Settling a debt can seriously hurt your credit score because it shows you didn’t pay the full amount. It may also stay on your credit report for up to seven years.
If you decide to go this route, be careful and make sure you understand the impact. Always get any settlement agreements in writing before paying.
Tip: Debt negotiation keeps your accounts in better standing and protects your credit score. Debt settlement should only be used if you truly have no other options.
Create a Strategy to Pay Off Your Debt
Once you know your budget and have prioritized your essential expenses, the next step is deciding how to pay off your debt in the smartest way possible.
The Snowball Method (Start Small)
"Snowball method, smallest debt to largest. Keep paying minimums on all of them but throw all your extra money at the smallest balance."
Here's how it works:
- List all your debts from smallest to largest
- Pay the minimum on all debts
- Put extra money toward the smallest debt
- When it's paid off, move to the next smallest
- Repeat until all debts are gone
Why this works: You get quick wins. Paying off small debts feels good and keeps you motivated.
The Avalanche Method (Save Money)
"Start paying your highest interest open accounts while making minimums on everything else."
Here's how it works:
- List all your debts by interest rate (highest first)
- Pay the minimum on all debts
- Put extra money toward the highest interest debt
- When it's paid off, move to the next highest interest
- Repeat until all debts are gone
Why this works: You pay less money overall because you tackle high-interest debt first.
Which method should you use?
- Choose snowball if you need motivation
- Choose avalanche if you want to save the most money
- Either way is better than doing nothing
Tip: If you’re motivated by fast results, go with Snowball. If you want to save the most money, Avalanche might be the better choice.
Smart Debt Moves Most People Don't Know
Balance transfers can help
"Look at getting a new credit card that offers introductory rates for 6+ months of 0% or much more attractive rates."
If you have good credit, you can move debt to a card with 0% interest for a while. This gives you time to pay it off without interest piling up.
Talk to your creditors
Most people don't know this: You can call and ask for help. Many companies will:
- Lower your interest rate
- Set up payment plans
- Reduce what you owe
- Stop charging late fees
The worst they can say is no. But often, they'll help if you ask.
Check for old debts
Some debts might be too old to collect. Check your credit report. If a debt is more than 7 years old, it might not matter anymore.
Bonus Tip: Know About Special Rules That Apply To Medical Debt
One important note many people miss: medical debt is different.
"Medical debt should be prioritized last. There are new policies — it can’t be included on credit reports, and it doesn’t build daily interest like credit cards."
Because of these new rules, you can focus on higher-interest debts first and handle medical bills later without hurting your credit as much.
Find Small Ways to Increase Cash Flow
By now, you already know that selling unused items, picking up side gigs, or finding higher-paying work can help speed up debt repayment. This isn’t new advice — but it’s worth repeating because it really works.
One user took it to the extreme:
"I got two jobs, worked out at the gym to stay healthy, and even gave up rent to save as much as possible. It sounds crazy, but it helped me pay off debt fast."
Of course, not everyone needs to go that far.
Another commenter offered a balanced perspective:
"The best decision I made was prioritizing my health and stability. I paid rent again, focused on my well-being, and slowly worked my way up at my job. I reduced my stress and finally started enjoying life while becoming debt-free."
The Mathematical Truth About Low Income
"You can't solve a low-income problem by just saving money—you need to find higher income. Once you do that, 100% of it should go to debt payments."
The brutal math: If you're barely covering minimum payments, cutting expenses won't solve the problem. You need more money coming in.
The lesson? Boosting your income — even in small ways — is powerful. But always balance it with your health and quality of life.
Advanced Strategies Most People Miss
- Check for unclaimed property: Some states let you claim forgotten refunds or old checks. You might find unexpected cash.
- Prioritize smartly: If you can’t pay everything, focus on debts with the most serious consequences first.
- Review your credit report: Some older debts might have fallen off already — always check before making payments.
What to Expect: The Timeline
- Months 1-3: Adjustment period. You'll feel overwhelmed, but systems start working.
- Months 4-6: Momentum builds. You'll see balances decreasing and feel more in control.
- Months 7-12: Significant progress. Some smaller debts might be completely paid off.
- Year 2 and beyond: Major debt reduction. You'll start seeing the light at the end of the tunnel.
The Mindset Shifts That Matter
- From avoidance to engagement: "I haven't been answering calls" → "I'm calling them first"
- From perfection to progress: You don't need to pay everything off immediately. Consistent progress beats perfect plans.
- From shame to strategy: Debt is a math problem, not a moral failing. Treat it like any other problem to solve.
- From isolation to community: The forum responses prove you're not alone. Others have walked this path successfully.
Red Flags to Avoid
- Debt consolidation scams: Be wary of companies promising to eliminate debt for pennies on the dollar.
- Bankruptcy mills: If considering bankruptcy, research attorneys carefully.
- Payday loans: These will make your situation worse, not better.
- Ignoring the problem: The debt won't disappear. It will only get worse with time.
The Encouragement You Need
The most important takeaway from this forum discussion isn't just the practical advice – it's the proof that people in seemingly impossible situations have found a way out. As one commenter beautifully put it: "Here I am, 12 years later, remarried with a 7-figure house and 7-figure bank account, giving the same advice to a stranger on Reddit."
"We're only here for a short time. Why die with money in the bank and no debt if we didn't enjoy life while we were here?"
This doesn't mean being reckless with money. It means don't sacrifice your basic health and well-being for debt repayment. Find sustainable approaches that improve your life while eliminating debt.
Getting out of debt when you're broke isn't about being perfect. It's about being consistent.
You don't need to pay everything off tomorrow. You just need to start today.
Every dollar you put toward debt is a dollar closer to freedom. Every small step counts.
The formula is simple:
- Spend less than you make
- Put extra money toward debt
- Don't give up
You can do this. Thousands of people have done it before you. They started with no money and lots of debt. They made a plan. They stuck to it. They got free.
Your turn starts now.
FAQ: How to Pay Off Debt With No Money
Can I really pay off debt if I have no money?
Yes, but it takes creativity and patience. Even if you feel broke, small extra income (side gigs, selling items, or small cuts to expenses) can help you make at least minimum payments and start reducing balances over time.
Will negotiating with creditors hurt my credit?
It depends. Asking for lower interest rates or hardship programs usually doesn’t hurt your score. But if you settle a debt for less than you owe, that can negatively impact your credit and stay on your report for up to seven years.
What if I can’t make even the minimum payments?
If you truly can’t pay, contact your creditors right away and ask for hardship options or reduced payment plans. You might also look into nonprofit credit counseling or, as a last resort, consider bankruptcy.
Should I pay medical debt first?
Medical debt is usually lower priority because new rules say it doesn’t show up on credit reports as easily and often has more flexible repayment options. Focus on higher-interest debts first.
How do I decide which debt to pay off first?
You can use the snowball method (smallest balance first) for motivation or the avalanche method (highest interest rate first) to save money. Choose what keeps you motivated and fits your situation best.
Are balance transfer credit cards a good idea?
They can help if you’re disciplined. You can move debt to a 0% intro APR card and pay it off without interest. But watch out for fees, and make sure you pay it off before the promo ends.
Can I really negotiate my debts down?
Yes. Many creditors will work with you if you show hardship. Some may lower your payment, reduce your interest, or even settle for less than the full amount — just remember it can impact your credit.
Remember: This article is based on real forum discussions and personal experiences. Always consult with qualified financial professionals for advice specific to your situation.