Updated: Oct 19

Life Happens! If you are living from paycheck to paycheck and some life event like illness, divorce, loss of a job occurs you are likely to be having trouble paying your bills and the result of that is hearing from creditors on a regular basis, there are several things that you can do to make your financial situation better.

Where should you begin?

Decide What You Can Handle on Your Own

There are several things you can do to help yourself dig out of your financial hole. Developing a budget is a great way to start. Take a good look at what you earn vs. what you spend and decide if the former is more than the latter. If you earn more than you are currently spending, take a good look at where your spending is out of control or where you could cut back in order to make a dent in your debt load. Creating and sticking to a budget might be enough to help you manage your debt issues.

If bill collectors are calling you, it is important to let them know things are tight. In many cases, they will work with you to create a modified payment plan. It is especially important to contact your mortgage lender and or auto financer if making your payments have gotten difficult.

Debt Relief

Those with significant credit card debt might benefit from using a “debt consolidation” or “Credit Counseling Service” because these services help create new payment arrangements at reduced interest rates. It is important for you, to do your due diligence and before you commit to any service, contact your state’s Attorney General Office to ensure a company is legitimate. Also there are services that help you settle your debts for less than the value owed. It is important to make sure you understand the risks associated with debt relief services, especially when it comes to debt settlement and debt elimination. These programs affect your credit and can result in exorbitant tax bills, so carefully examine all of your options before moving forward.


A final consideration for those drowning in debt is bankruptcy. Often viewed as a last resort, bankruptcy has a significant negative impact on your credit report and its affects last for even to ten years. However, if your debt issues are so dire that there is no end in sight, bankruptcy might be your only option.

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