Making a Debt Plan

It's almost impossible to succeed in conquering debt without a solid debt plan in place. Your debt plan may involve one or more debt management methods, such as debt consolidation, credit counseling, etc. On this page, you can read suggestions on how to select the right plan of attack for your debt and how to make it work for you.

Selecting an Approach

You don't necessarily have to settle on just one approach to overcoming debt, but you should prioritize one debt management tool as your primary strategy. For example, you might decide to enroll in a debt consolidation program but also seek the advice of a credit counselor. To decide which approach is right for you, ask yourself these questions:

• Am I struggling mainly with credit card debt? If credit card debt is your biggest problem, debt consolidation is an excellent choice. Consolidation is designed for unsecured accounts like credit card debts. On the other hand, if you are struggling mostly with secured debts, such as your mortgage loan, you might need to look into refinancing or other debt management options.
• How severe are my debt problems? Debt consolidation is recommended for people with mild to moderate debt problems. People with severe debt problems, meaning debtors who are very behind on payments or who have extremely large balances, may need to consider more intensive solutions, such as bankruptcy.
• How quickly can I pay off my debt? If you believe you can pay off your debt fairly quickly, you might not need a full consolidation plan. You may be able to use a short-term credit card balance transfer or a brief personal loan to consolidate your debts instead.

Beginning Your Plan

Once you have a debt plan in place, you will need to research your chosen debt management approach to find out how to take the first step. With professional debt consolidation, for example, you'll have to find a consolidation company with proven results and experience. You can get a free estimate from such a company on the home page of this site. Alternatively, if you choose to take out a consolidation loan, you should research interest rates by consulting various lenders. If you've chosen credit counseling, you can look for non-profit agencies in your area and schedule a consultation. As you begin your debt management plan, be sure to find out how long it will take you to get completely out of debt and how much it will cost to do so.