Are You Deep In Debt?

Are you having difficulties paying off your bills? You are not alone. In fact, millions of people across the United States are encountering the same problem as you. Most of those encountering difficulties are middle-income families who are currently employed, but just can't seem to keep their debt payments up to date.

The Importance Of Action
The most important way to beat the continual debt cycle is to act. Too many consumers pay no mind to a burgeoning debt problem until it is too late. Develop a plan, set goals, consider a budget. Whatever you try to better your debt situation, make sure you follow through on it. Start small if you must. Remember the old adage: "actions speak louder than words."

There are differing degrees of financial distress, of course, and most of them do not even require outside help. Over the course of this article, we will show you how you can improve your financial standing by yourself.

Are You In Financial Trouble?
If you are uneasy about picking up the phone because bill collectors are constantly calling you, it's pretty obvious that you are having hard financial times. Another important question: has it become more difficult to pay your monthly bills with your paycheck alone? If this, or any of the following statements are true, you may want to consider outside help:

  • I routinely spend more than I earn.
  • I often find myself putting everyday purchases on my credit cards.
  • I am only able to make the minimum payments on my credit cards, and the minimums are getting harder to cover as time goes on.
  • If I lost my job, I really don't know how I would get out of debt.

Do Some Things Immediately

Before you consider outside help, however, there are some things you should do. First, make a list of creditors and include the amount of money you owe each. Scan statements for the previous six months and note any incorrect charges. Recent estimates show that almost 5% of all credit card debts are based on incorrect interest calculations or overcharges. If you find that something on your statements is disputable, contact your creditor directly. If you find that your creditor will not listen, contact your state consumer protection office or attorney general.

Inform Creditors Of Problems
Sometimes, it is possible to get your credit card interest rates lowered by yourself. While not common, some creditors will be sympathetic to their clients, especially when the reason for financial problems is out of your control - such as job loss or medical bills. In some cases, a creditor will work with you to create terms that will ensure you can meet your obligations.

Plan, Plan, Plan
The easiest way to start seeing real changes is to create a budget for your expenses that allows you to reduce your debt. This is as simple as itemizing your necessary expenses (rent, food, health care) and optional expenses (entertainment to consumer goods) and determining where you can afford to make cuts. Sticking to the plan, while the most difficult thing to do, can pay off in spades.

Re-Define What Is Truly Necessary
Like it or not, eating at restaurants and going to concerts and movies are not "necessary expenses". When times are tough, it is important that you make this distinction. If you own a car, you may want to consider taking public transportation to work instead. Savings on fuel, insurance and maintenance fees will quickly add up. Consider buying bulk and generic products at the supermarket (Tip: Make a list of the items that you need, and buy nothing else but what is on your list).
Your best bet to begin to eliminate your debt is to stop creating new debt. Never leave the house with your credit cards. If you must pay for something, use a debit card or cash.

Consider Tapping Your Savings
Using your savings to pay down your debt is often an excellent way to save hundreds of dollars. If you have two cars, you may want to consider selling one and using the proceeds to pay down debt.

There are a number of ways to beat your debt, but it goes without saying that the best way to start is a little self-analysis coupled with real action. You may not need outside help to eliminate your debt after all.

Contact us here.

Mini Article Index
About Bankruptcy - the machinery behind bankruptcy.
Are You Deep In Debt - a questionnaire.
New Year's Debt Resolution - break the cycle today.
Credit Help Negatives - some must-to-avoids.
Managing Secured Debt - an important primer.
Seeking Outside Help - what you should know.

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