Drowning in Debt

Are you having difficulty paying your bills? Battling with credit cards

? Many Americans are facing tough challenges for a variety of reasons, ranging from the obvious-over spending-to serious, unforeseen circumstances like loss of employment, medical emergencies, natural disasters, lawsuits, divorce, and death. Depending on your "depth" of debt, there are steps you can take to either head off a future of serious financial woes or, if creditors are already knocking at your door, save yourself from further anguish and take control of your money.

First and foremost, acknowledging that there is a problem and making a commitment to paying off the bills is a step in the right direction. Deciding not to transfer balances from one credit card to another and/or opening more credit card accounts will take a huge burden off your shoulders.

Next, go over your budget in a very detailed way. Figure out what your fixed expenses are such as mortgage, auto, and utilities. Don't forget to include things like gifts, clothing, and entertainment. With a realistic budget it can be determined if you make enough money to pay your monthly bills and if there is any money left over. Creating a budget will enable you to make the best decisions for your situation and set some concrete goals. Maybe you have the money, but have been lazy in getting out your payments on time or you spend too much money on unnecessary items. Here are some options you may need to consider:

Obtain a second job

Cut your budget by changing your lifestyle--eliminate luxury items such as cable television, cell phones, eating out, and your daily coffee at the local coffee house. Stop using your credit cards immediately.

Call your creditors to explain why you're having difficulty. Together, you may be able to come up with a payment plan that lowers your payment. Waiting for the lender to turn the account over to a debt collector is too late.

Seek professional credit counseling help or enroll in a debt management plan with a reputable agency, where certified credit counselors can assist you in customizing a plan of action based on your specific situation

Whatever the reasons for your debt, it can be overcome if you develop a realistic plan and stick to it.

Drowning in Debt

By: Greg McTaggart

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