Five Steps to Get Out of Debt in Record Time: The DOLP Method

Today, I'm going to share with you a system to help you get out of debt called DOLP, which stands for "done on last payment." The DOLP system is the cornerstone of your Debt Free For Life plan. I've talked about it for over a decade, and I've taught it to millions of people. It's simple and it works. Are you ready? Let's get started with a real-life example of someone who has used the system to great success.

First, get all the statements from every credit card account you have. Now get some folders and create a file for each different credit card account and label it appropriately (e.g., "Capital One Visa"). From now on, you will put all of your statements and payment receipts for this particular account in this particular folder. For each folder, write the amount you currently owe. Every time you make a payment, you'll write the new (lower) debt amount and the date.

Now, make a list of each credit card account and its current outstanding balance, starting with the smallest debt and working down to the largest. In this way you will figure out exactly how much you owe and who you owe it to:
  • Name of Creditor
  • Account Number
  • Outstanding Balance
  • Monthly Minimum Payment
  • Interest Rate

Figure Out Your Other Debts

Next, gather up all the statements for your mortgage and related debts, such as second mortgages and home-equity loans. As you did before, create a file for each debt, label it (e.g., "Wells Fargo home mortgage"), and on the front of the folder write the total amount you currently owe. Do the same for any car loans, student loans or other personal loans. Now add up all of this other debt and record it as follows:

  • I owe $______ on my primary mortgage.
  • I owe $______ on second mortgages/home equity loans, etc.
  • I owe $______ on second property/vacation homes or rental properties.
  • I owe $______ on student loans.
  • I owe $______ on car loans/boat loans.
  • I owe $______ on other installment debt.
  • The total amount of additional debt I carry is $______.
  • The Grand Total I owe as of ______ [today's date] is $______.

The purpose of the DOLP plan is to build "debt-reduction momentum." Here's how you do it.

Step One:Fill Out the DOLP Worksheet

You'll find an interactive version of the DOLP Worksheet here. In the first column, write in the name of the loan account. In the next column, write the balance you owe, followed by the minimum payment due. The fourth column is for the payment due date. For the moment, hold off on filling this one in.

The last two columns are for the loan's DOLP Number and its DOLP Ranking. These are the heart of the DOLP system, and figuring them out (which we'll do next) is super easy.

Step Two:Calculate the DOLP Number For Each Account

To figure out each account's DOLP Number, divide the outstanding balance by the minimum monthly payment. For example, if you owe $500 on Visa and your minimum payment is $50, take the $500 and divide it by $50, which would give your Visa account a DOLP Number of 10. The 10 represents how many monthly minimum payments (not counting interest) it would take to pay off your debt.

After you've finished with your credit card accounts, do the same for your other debts. With most closed-end loans, such as mortgages and car loans, the remaining number of payments is listed on your statements. If it's not, leave the space for the DOLP Number blank. We'll come back to it later.

Step Three:Assign Each Account a DOLP Ranking

This is easy. The account with the lowest DOLP Number is ranked #1, the account with the second lowest is ranked #2, and so on.

Step Four:Calendar Your Due Dates

Now fill in the "payment due date" column in the worksheet for all of your loans. Add these due dates to whatever calendar system you use. Set your calendar alerts to remind you of all your payment due dates at least five days ahead of time. This should prevent you from making any late payments, which can cost you an absolute fortune.

Step Five:Fast-Pay Your Debt -- The DOLP Way

Each month, make the minimum payment on every credit card account ... except the one with the lowest DOLP Ranking. For that card, you make as big a payment as you can manage-ideally, at least double the minimum.

Once a card has been paid off, bury it and start attacking the account with the next lowest DOLP Ranking.

DOLPing is simply a matter of prioritizing your debts and then fast-paying the right card down. It takes time, effort, and commitment. But with your new-found knowledge, plan, and willingness to take action, you'll make steady progress.

David Bach is the New York Times bestselling author of Debt Free For Life. To ask David questions, visit his website at or

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