10 Steps Toward a Debt-Free New Year

Have you examined your family finances lately? Are you shocked and anxious about the amount of debt you have? If your New Year's resolutions include getting out of debt or getting your financial house in order, here are ten easy steps for regaining financial control in the New Year:

1) Seek help. If you're not sure how to proceed, or you're feeling too overwhelmed to act for yourself, call a non-profit credit-counseling program for advice and assistance in working with your creditors to set up a repayment plan. Consumer Credit Counseling Service has offices throughout the US. Call 1-800-388-CCCS, 24 hours a day, for an office near you. You can also find information about debt problems from your local church, library or bank. Look for information online as well.

2) Contact your creditors. As soon as you're aware you won't be able to make a payment, contact your creditors. Creditors are more likely to work with you if they're contacted before the payment is actually overdue. Debt collectors are trained to solve payment problems, so don't be afraid to be honest with them about your financial situation. Stay calm. If you commit to paying the bill by a certain date, be sure you follow through on that commitment. The creditor won't be likely to work with you again if you don't keep your pay- ment promises. If you can't make your minimum monthly payments, write to each creditor individually and see if you can work out smaller regular monthly bills. Be sure to explain to them why you fell behind in your bills, your current income, your other financial obligations and the exact amount you can pay them each month.

3) Cut up all credit cards and send them back to the issuing companies immediately. Officially close all credit accounts. A temptation when you start seeing lower balances on your accounts could lead you to charge the credit limits right back up again if the accounts remain open. Don't take out more loans or open any new credit accounts until back bills are paid in full.

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