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Americans are debtors, not savers, so it's important to understand your debt and learn to manage it. To learn to manage your debt, begin by analyzing ytour debt load to see if you've already got too much to handle. Next, learn that not all debt is bad -- but you have to learn how to use the "good" debt in your financial plan. Some of the situations why people are in debt are unavoidable -- like losing your job or unexpected medical expenses -- but all can be managed with proper planning. |
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Debt Management
Having trouble paying your bills?
Getting dunning notices from creditors?
Are your accounts being turned over to debt collectors?
Are you worried about losing your home or your car?
You’re not alone. Many people face a financial crisis some time in their lives.Whether the crisis is caused by personal or family illness, the loss of a job, or overspending, it can seem overwhelming. But often, it can be overcome. Your financial situation doesn’t have to go from bad to worse.
If you or someone you know is in financial hot water, consider these options: realistic budgeting, credit counseling from a reputable organization, debt consolidation, or bankruptcy. Debt negotiation is yet another option. How do you know which will work best for you? It depends on your level of debt, your level of discipline, and your prospects for the future.
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| Analyzing Your Debt |
| Understamding Debt |
| Regaining Control |
| Tapping Into Your Resources |
| Debt Reduction |
| Debt Collection |
| Wage Garnishment |
| Setting Goals |
| Debt Management Services |
Debt Management Warnings
Reputable credit counseling organizations employ counselors who are certified and trained in consumer credit, money and debt management, and budgeting. Those organizations that are nonprofit have a legal obligation to provide education and counseling.
But not all credit counseling organizations provide these services. Some charge high fees, not all of which are disclosed, or urge you to make “voluntary” contributions that can cause you to fall deeper into debt. Many claim that a debt management plan is your only option before they spend time reviewing your financial situation, and offer little or no consumer education and counseling. Others misrepresent their nonprofit status or fraudulently obtained nonprofit status by misrepresenting their business practices to regulators.
The Federal Trade Commission (FTC), the nation’s consumer protection agency, and some state Attorneys General have sued several companies that called themselves credit counseling organizations. The FTC and the states said these companies deceived consumers about the cost, nature, and benefits of the services they offered; some companies even lied about their nonprofit status. Several of these companies are now going out of business. Similar companies also may be shutting their doors, even though they haven’t been sued by the FTC or the states. That could be of special concern if you have a debt management plan with one of these companies.
USE CAUTION
Turning to a business that offers help in solving debt problems may seem like a reasonable solution when your bills become unmanageable. Be cautious. Before you do business with any company, check it out with your local consumer protection agency or the Better Business Bureau in the company’s location. One rule to remember is that if a credit repair offer seems too easy or just too good to be true, it probably is too good to be true. And knowing your rights can help you steer clear of rip-offs.