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Learn... Plan... Take Action... Eliminate Debt!

Steps to Build Debt Elimination Plan
  Step 1 - Assess the situation
  Step 2 - Analyze your spending
  Step 3 - Identify ways to reduce spending
  Step 4 - Develop the plan
  Step 5 - Take action
  Step 6 - Monitor the results
  Step 7 - Get help if needed
  Debt payment
  Debt evaluation
  Interest payment
  Debt worksheet (pdf)
  Debt worksheet sample (pdf)
  Debt worksheet (xls)
Get help right away

If you find yourself with a lot of debt and can't seem to come up with a plan, try these steps to get your finances back on track.

  • Admit there's a problem that is out of control. Act now!
  • Verify your debts. Review what creditors claim you owe to make certain you really owe them. If you dispute a debt, contact the creditor directly to resolve your questions. If you still have questions, contact your state or local consumer protection office or state Attorney General.
  • Prioritize your debts. Protect your home first. Credit card and medical debt can wait if necessary.
  • Call your creditors now and explore bill-paying options. Explain why you're having trouble, and try to work out an acceptable payment schedule.
  • Itemize your household and living expenses. Highlight the essentials - housing, utilities, transportation to work, etc. Create a spending plan that allows you to reduce your debt, and then stick to the plan.
  • Try to reduce your expenses. Cut out unnecessary spending, consider public transportation, clip coupons, purchase generics, and avoid impulse purchases. Above all, stop incurring new debt.
  • Use your savings and other assets to pay down debt. Withdraw low-interest savings to settle high-rate loans. Sell a second car to provide cash and also reduce insurance and other maintenance expenses.
  • Look for additional resources from governmental and private sources for which you may be eligible. Government assistance may include unemployment compensation, Aid to Families with Dependent Children, food stamps, low-income energy assistance, Medicaid, and Social Security including disability. Other resources may be available from churches and community groups.
  • If absolutely necessary, and your income situation has now improved and you just need to catch up on your prior debt, refinance your credit card debt with a home equity loan. If your situation has not improved, or this is not an option, see the next steps.
  • If you live on a low, fixed income, consult a legal aid society and learn your rights.
  • If you can begin a debt repayment plan, work with an accredited nonprofit credit-counseling agency in your state.
  • Get professional help. This could include personal bankruptcy.