News From Our Blog

How to Get out of Debt and Avoid Fraud

More than one and a half million people file for bankruptcy every year. Many people fall behind on their bills because they’ve lost their jobs, suffered from a long-term illness, or because they were unable to manage their personal finances properly.

Fortunately, there are many resources out there that can help you put together a plan to pay off your debt, including credit counseling agencies.

Signs Your Finances Are in Trouble

You don’t have to be close to filing for bankruptcy to realize that you are in financial trouble. These are some signs that you might have too much debt:

  • You are frequently late on your payments
  • You are close to your credit limit on your credit cards
  • You use your credit cards to make payments on other cards
  • You find it difficult to save money
  • You’ve been denied credit recently

How to Get out of Debt

To get out of debt and set your finances straight, carefully analyze your income and expenses. Make sure you:

  • Make a budget and stay within its limits.
  • Figure out your total debt and also what you owe to each creditor, your monthly payments, interest and payment due dates.
  • Prioritize repayments, focusing first on things such as your mortgage, rent, and utilities.
  • Make a repayment plan for each creditor and determine how long it will take you to pay off the debt. Make sure to review your credit card statements, as they will include information about how long it will take to pay off your balance, per new credit card laws that went into effect in 2010.
  • Don’t incur any additional debt.

How to Choose a Credit Counseling Agency

Consider a credit counseling agency if your debt is too much to handle. These companies offer workshops on how to manage your money and advice on how to administer your debt. They can also help you create a budget and even negotiate your debt with creditors.

Many of these companies are nonprofit organizations, however be careful, as some charge excessive fees for their services and others might not even deliver what they promise. Consider these important suggestions before choosing a credit counseling agency:

  • Pick a counseling agency that offers several services. This will help you avoid organizations that promote only certain services.
  • Avoid credit counseling agencies that charge you for simply providing information, or agencies that demand a percentage of the amount that you are supposedly saving. Ideally, you should request the cost of their services in advance and in writing.
  • Stay away from agencies that ask you to stop making payments on your debt or ask you not to contact creditors.

The Department of Justice has a list of credit counseling agencies that are approved to provide pre-bankruptcy counseling.

We welcome your comments if you are 13 or older, and hope that our conversations here will be polite. You are responsible for the content of your comments.

We do not discriminate against any views, but may delete any of the following:

  • violent, obscene, profane, hateful, or racist comments
  • comments that threaten or harm the reputation of any person or organization
  • advertisements or solicitations of any kind
  • comments that suggest or encourage illegal activity
  • multiple off-topic posts or repetitive posts that are copied and pasted
  • personal information including, but not limited to, e-mail addresses, telephone numbers, mailing addresses, or identification numbers

In short: be nice and add to the discussion. If you continually violate this policy, we may limit your ability to comment in the future. If you have any questions or comments about this policy, please e-mail us.