Are you feeling the pinch of high monthly debt payments? Debt management and credit counseling services can help.
These nonprofit agencies work with your creditors to get them to reduce their interest rates and the amount of your minimum monthly payments. The credit card companies have the advantage of dealing with a reputable debt management and credit counseling service instead of dealing with the creditor. Debts are paid with "collected funds," so creditors never have to worry that a payment check will bounce.
What To Know Before You Go
Before you sit down for a session with a debt management and credit counseling service, you have some homework to do. This homework consists of itemizing your debts and itemizing your spending.
Many debtors have been in denial about how much they spend and how much they are in debt, so putting pen to paper and making a list of both debts and spending can be a scary experience. Don't panic, and don't procrastinate. This is step one of a journey toward being in control of your debt and your financial future.
Go about the process methodically. First, gather up all your statements from credit card companies, doctors' offices, collection agencies, student loans, car loans, insurance, and utilities. Make a list of the creditor, the amount owed, and the monthly payment. Enter this information twice: Once in your debt record and once in your spending record.
You now have a complete picture of your total debt and your minimum monthly payments on your debt. You are still not ready, though, to get debt management and consumer counseling services yet. You need to complete your spending records.
Track Your Spending
For one entire week, keep track of every cent you spend by credit card, debit card, cash, check, or automatic debit. Write down your automatic teller machine fees, your bus fares, and the cost of every cup of coffee you buy. Do not write down expenses that you've already tracked when you captured your monthly spending.
After you have a week's worth of expenses, you are ready to visit the debt management and consumer counseling service provider. At this point, many consumers may not need debt management and consumer counseling services after all. Most consumers have already done what they thought they needed counseling to do: faced the reality of their debts and their out-of-control spending.
Self Help
If you want to try to manage your debt by yourself instead of using debt management and consumer counseling services, go through your expenses with a sharp red pencil, and slash, slash, slash those expenses.
Start making your own lunch, drinking only coffee that you make yourself at home, and doing without the premium cable and satellite channels. Apply the money you save to your credit card debt, and you can methodically decrease your debts.
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