Debt Help: Advice on Taking Control of Your Debt
Written by Charles on January 28th, 2009If you are reading this article, you are probably one pf the thousands of Americans struggling to make their bills each month. If you want to get out of debt, and I mean really want to get out of debt, here is some practical debt help advice.
1.Make a list of your Debts
The first step to getting out of debt is to understand where all your debt is. Don’t just write down credit card and house payments. We are talking cable bill, car insurance – everything outside of the umbrella of utilities.
2.Work towards a budget
If you are serious about getting out of debt, you will sit down and write a budget. It’s simple, you just need to get motivated. Don’t be scared of what the numbers are going to look like. Not knowing doesn’t make the problem go away.
For your budget, add up all your income. Be sure to include all income – even stock dividends if you have any. Subtract your debts from that monthly income. You now have a working budget. You know how much you need to make and how much you actually make.
3.Work out your debt priorities
This is a tricky step. If you are making less than you are paying in debt each month, you need to prioritize your debts. In this step, look at which debts must be paid. House payments, car payments, insurance – that type of thing. Those debts you must pay, but the others are more flexible.
4.Develop a plan for those non priority debts
The debts such as credit cards and other unsecured forms of debt can be paid at different intervals, for different amounts. The trick is listing these debts from most flexible to least flexible.
Do this by contacting the creditors and asking if you can work out a payment schedule to help get caught up. Work with the ones who work with you. You would be amazed at how willing these creditors are to work with you. You might lose your line of credit, but you will be able to negotiate a lower payment and take control of your debt.
Creating a budget and prioritizing your debts is the best debt help advice one could give. By doing these four simple things, you can get caught up on your bills and even lower your monthly payments.
Tags: Debt Help