Debt crushes your financial goals and causes overwhelming feelings associated with falling further behind. Burying your head in the sand won't solve your debt problems if you find yourself struggling to pay off your creditors. Take a proactive approach to resolving and paying off your debts. Some debtors are able to get the accounts under control by themselves while others need professional help.
Acknowledge the Problem
Ignoring the collection calls and letters from creditors causes more problems for you and your debt situation. Gather all of your creditor statements and sit down to figure out where you stand. Knowing exactly how much you owe and to whom helps you break down the situation to handle the matter. List all of the creditors and the details of the debt, including the amount, payments and interest. This gives you a reference for prioritizing your debts for payoff.
Trim the Fat
You feel like your budget is stretched thin, but most people have areas they can cut to save more money. Review your spending habits both at the store and on your monthly services. If you are falling behind on payments, cut out unnecessary things like a satellite radio subscription, cable, Internet and club memberships. Scale back your menus and stick with low-cost meals like pasta and soups until you get caught up. Many services and items people view as necessities are actually nonessentials that drain your bank account. Put any found money toward your debts to get them paid of.
Talk About It
Debt carries a sense of shame for many people, especially if you can't keep up with your payments. Instead of reaching out and talking about the problem, the tendency is to act like everything is fine while you continue digging a deeper financial hole. Talking about your debt situation with family members or a trusted friend may take away some of the stress you're feeling. The person you reach out to might offer suggestions or advice on getting out of debt. She may even be struggling with a similar financial situation.
Talking to your creditors is another way to get help with your debt. In most cases, creditors will work with you to set up a payment plan so you can get caught up and pay off your debts. The sooner you talk to your creditors, the more likely they will be able to help you.
Get Professional Help
If your debts are long past due or you have no way of keeping up with the payments, contact a nonprofit credit counseling agency. The counseling session won't affect your credit, but it will help you look at your financial situation and come up with a plan to fix it. The counselor creates a budget for you with your help. He offers suggestions for cutting costs if necessary. In certain cases, a debt management plan makes sense. The plan will show up on your credit report, but it allows you to get a lower interest rate and lowered payments for your credit card accounts. You pay the credit counseling company who disperses the money to each of your creditors. Avoid companies that charge large fees for the service.
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