Are You Seriously In Debt? 
If you are having trouble paying your bills or are worried that your student may soon be facing foreclosure, rest assured that you are not alone. Debt management is within your reach, and repairing your credit score is a definite possibility.

Most American consumers have faced a financial crisis in their lives. Whether your financial difficulties have been caused by a job loss, overwhelming medical bills or by everyday overspending, you can turn your debt around and, once again, face the future with a rosier outlook. It won’t be easy; it won’t be quick. But it can be done. And you can do it.

Some Realistic Solutions to Debt Management
By facing the harsh facts of your financial instability, you can keep your monetary train from derailing. Some tools to getting out of debt include:

• Budgeting
• Credit counseling from a reputable organization
• Debt consolidation
• Bankruptcy
• Debt negotiation

Debt Management Tools
Develop a budget. You need to assess how much money you take in and how much money you spend. Start by listing your income from all sources. Then, list such “fixed” expenses as your mortgage or rent, car payments and insurance premiums. Then list such variable expenses as entertainment, recreation and clothing. Tracking all of your expenses is a helpful way to identify your spending patterns. The goal is to insure that you can pay for housing, food, health care, insurance and education.

Debt Management

Debt Management Plan

Contact your creditors immediately. If you are having trouble paying your bills, try to arrange a payment plan that reduces your payments to a more manageable level. Do not wait until your accounts have been turned over to a debt collector.

Deal with Debt Collector Harassment. The Fair Debt Collection Practices Act is a federal law that dictates how and when a debt collector may contact you. A debt collector may not call you before 8 a.m., after 9 p.m., or while you are at work if the collector knows that your employer does not allow such calls. Collectors may not harass you, lie or use unfair practices in trying to collect a debt. They must honor a written request from you to stop further contact.

Manage Auto and Student Loans. Debts are categorized as either unsecured or secured. Secured debts are tied to an asset such as your house or your car. If you stop making payments, lenders can foreclose on your house or repossess your car. Conversely, unsecured debts are not tied to any asset, and include credit card debt, medical bills and signature loans.

If you fall behind on your mortgage, contact your lender immediately to avoid foreclosure. Most lenders will work with you if they believe you are acting in good faith and the situation is temporary, reducing or suspending your payments for a short time. If you and your lender cannot work out a plan, contact a housing counseling agency. Some agencies limit their counseling services to student owners with FHA mortgages, but others offer free help to any student owner having trouble making mortgage payments. Call the housing authority in your area for help in finding a legitimate housing counseling agency near you

Credit Counseling. If you are unable to work out a budget, cannot arrange a repayment plan with your creditors and cannot keep track of mounting bills, you may want to contact a credit counseling organization. Many credit counseling organizations are nonprofit and will work with you to solve your financial problems. However, just because an organization claims to be “nonprofit,” there is no guarantee that its services are free, affordable or legitimate. A local university, military base, credit union and family and friends may be good sources of referrals for reputable credit organizations.

Debt Management Plans. If your financial problems stem from serious indebtedness or your inability to repay your debts, a credit counseling agency may recommend that you enroll in a debt management plan (DMP). You should consider a DMP only after a certified credit counselor has reviewed your financial situation and has offered you customized advice on managing your money. In a DMP, you deposit money each month with the credit counseling organization, which then uses your deposits to pay your unsecured debts according to a payment schedule the counselor develops with you and your creditors. A successful DMP requires you to make regular, timely payments, and could take 48 months or more to complete.

Debt Consolidation. You may be able to lower your cost of credit by consolidating your debt through a second mortgage or a student equity line of credit. However, these loans require you to put up your student as collateral. If you can’t make the monthly payments, you could lose your student to foreclosure. Also, the costs of consolidation loans can add up. In addition to interest on the loans, you may have to pay “points,” with one point equal to one percent of the amount you borrow.

Debt Elimination Scams
There are literally hundreds, even thousands of companies, who advertise on the Internet, through the airwaves, via snail mail and in person. They all promise to:

• Create a plan to completely eliminate all your mortgage, automobile and credit card debt
• Show you how you can avoid bankruptcy and other practices; this will damage your credit report as well as strictly limit any future borrowing options • Keep your personal finances private
• Avoid costly debt consolidation loans. This actually increases your debt and can extend the time it takes you to get out of debt
• Set you on a course of a future without the insecurity of being in debt

Unfortunately, most of these so-called legitimate companies are not really legitimate at all. In addition to not ending to your debt problems, most of the techniques that they propose may actually increase your debt as well as increase the time until you are free of debt. Do not fall for these phony claims! 

If you are considering any debt elimination program, take time to thoroughly research any organization on which you are counting to help you. Read all contracts and get all terms in writing.

We hope that the above information was helpful. For more help with your debt management, please take a moment to fill out the form on the bottom of this page to speak with a member of our professional debt consolidation staff. You will be happy that you took the time to secure your financial future.