Debt Management

Written by Abby Luttrell
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The most important step you can take if you are overwhelmed by your bills is to work out a budget. You may feel like a budget is useless if you are hit with a family emergency, a hospitalization, a loss of employment, or escalating costs. Yet your biggest hurdle is your own fear, and you can control it through planning and organization.

Consumer Credit Counseling

Consumer credit counseling can help you think through a workable budget for you and your family. A reputable, recommended credit counseling service will aid you in understanding what you have to pay out each month, and what you are bringing in. The key to debt management is to work out manageable monthly payments to allow you to preserve your credit rating and to bring down your debt.

Another goal of debt management is to contact your creditors and arrange a payment schedule. Your credit counselor will have a debt consolidation plan for you which will reduce your rate of interest. Debt consolidation companies specialize in working with non-profit credit counseling agencies to secure the best possible interest rates and lowest monthly payments for their clients.

By following the debt management guidelines given to you by your credit counselor, you can slowly return to financial health. Without counseling, it's easy to fall into bankruptcy, which will be a negative on your credit rating for 10 years. Even if you don't declare bankruptcy, missed payments can create a bad credit rating which will not be erased for 7 years.


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