5 Actions to Managing Excessive Debt
Are you having trouble paying your bills when they are due? Does the problem seem to be overwhelming? If you're deep in debt, here are some actions you may take to improve your financial situation.
#1: Make a Budget and Stick to It
Don't delay taking action. Make a budget right away, and keep track of your spending. Does your income cover your expenses? Is there an expense you can eliminate? Start by reconsidering what is a necessity, and what's a luxury. Your budget should cover all your basic necessities: food, housing, clothes, utilities and health-related costs. Consider how often you dine out or go shopping; and if any of these items could be cut back until you reduce some of your debt. Limit these activities to when your budget allows for them.
#2: Face your creditors.
Many people deal with their creditors by avoidance. Face creditors head on, let them know about your situation, and see if they can come up with a revised payment arrangement for the time being. Tell them that you are making changes to be able to pay off the debt, and that you are willing to cooperate.
#3: Deal with debt collectors.
The Fair Debt Collection Practices Act states that debt collectors can't be abusive, deceptive or unfair when trying to collect money from you. Understand that this federal law protects you, and is intended to help you be honest about your debts, and pay them off.