Step 1: Pray telling God you desire freedom from debts and ask Him to guide you in this process. Then, read 2 Kings 4:1-7 in the Bible to be encouraged by someone who successfully eliminated her debts by placing her trust and faith in God while completing what many would consider a very unual plan.
Step 2: Determine you personal financial picture – a summary of your assets (what you own) and your debts (what you owe). A detailed record of all debts which lists lender name, amount owed, payments required and interest rate will be very useful to determine your repayment proposal.
Step 3: Calculate the percentage or proportion of each individual debt compared to the total debt. These figures will be used to allocate what your proposed payments will be to each Lender.
Step 4: Determine your present actual budget situation. Consider all sources of income and all expenses. Be honest. We cannot emphasize enough the need for self-honesty here. Subsequent decisions and commitments to repay debt are placed in jeopardy if decisions are based on incomplete or inaccurate information.
Step 5: Determine the cash you have available to make all your debt payments.
Step 6: Calculate the payment amounts for each debt by multiplying the percentage of each debt determined in Step 2 by the cash available you calculated in Step 4.
Step 7: Prepare and mail an introductory letter to each Lender along with your first payment based on your calculations. Pray asking God to prepare the Lenders’ ears and hearts to be receptive.
Step 8: Make your regular payments as committed to in your letter to Lenders.
Step 9: Begin Snowballing – as the smallest debt is paid off, apply that payment to the next smallest debt. When the next smallest debt is paid off, apply those combined payments to the next smallest debt. Repeating this process will speed up the process of paying off all debts without drawing on any extra cash and, reduce the overall time it takes to become debt free.