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.

#4: Consider credit counseling.

Reputable credit-counseling organizations can offer assistance for those in need of help with their finances. A good counselor can help you come up with an improved payment arrangement of your debts. You can present this plan to your creditors for their approval, so they know you are working to pay off what you owe. If you demonstrate that you have a plan, creditors are generally willing to work with you.

#5: File for bankruptcy.

Filing for personal bankruptcy is a last resort to fixing — and the legal way of addressing — certain debt struggles. Once you file for bankruptcy, it will be reflected in your credit report for years, making it difficult for you to obtain additional credit, or gain employment. This highlights the importance of taking action early; rather letting your debts escalate to this point.

Begin your journey to financial stability by visiting your local North Country Savings Bank today. We will provide you with a trusted reference for credit counseling services. 

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