Many debt management companies will provide credit counseling services to help complete your debt relief plan.  If you want to substantially decrease the amount of money you owe your creditors, you can speak to a debt settlement company who can negotiate a loan settlement.

The benefits of debt consolidation:

• One low monthly payment
• Lower your interest rate dramatically
• Pay off your credit card in a few years as opposed to up to 30 years from just paying your minimum monthly payments, which are heavily weighted toward paying down interest as opposed to principal
• Settling credit debt will make you feel better after getting your credit card debt under control

1) Develop a Budget

Figure out how much money you can realistically spend on a monthly basis for each spending category in your life.  We’ve found that you can break your budget into several categories:

a) Food & Entertainment
b) Personal Spending (RX, Personal Health, Lunches, Shopping, Cell Phone)
c) Household Expenses (Utilities, Repairs)
d) Mortgage, Insurance, and Taxes

2) Contact Your Creditors

You have a relationship with your creditors and you need to show that you can respect this relationship by working with your creditors and pay your debt. If your debt is out of control, it might make sense to settle credit card debt as opposed to paying the full balance. In other circumstances, it might make sense to consolidate your debt into one monthly payment.

3) Manage Your Auto and Home Loans

If you fall behind in your payments, you need to realize you may risk losing your car or home. If you’re behind on car payments, you’re car may be repossessed. You want to make sure you avoid this problem by talking with your auto loan company if you fall behind on your payments and work out a plan that works for both you and your auto loan company. If you’re behind on your home loan, the process for foreclosing on your home is a long one that banks most certainly want to avoid. They will work with you to work out a plan that will work for you, assuming you ultimately keep true to the original agreement.