Debt Management: A Path to Economic Security

Rebecca Matthes, Guest Blogger

Did you know that the NFCC projected that 800,000 people in the U.S. would end up filing for bankruptcy in 2007?  That’s right, 800,000 people.  An article found on Smartmoney.com, written in October 2007, discusses the unfortunate problem of drowning in debt. It is noted that every year the National Foundation for Credit Counseling (NFCC) assists almost two million households nationwide. 

Several easy solutions to go about getting a handle on the problem are mentioned in the article such as getting a loan from a family member, borrowing from your 401(k), or consolidating your debt on a low-interest rate credit card or home equity loan.  Another thought is to cut your expenses.  In other words, track your expenses and see what you can eliminate.  Some may find this route quicker and all around better than the first three alternatives. 

But if one’s debt is of epic proportions, seeking out a debt counselor may be the best fit.  It’s recommended to seek out a non-profit firm since you’ve already spent too much.  Do your homework.  Find out about the agency’s policies, fees and services provided.  Get these things in writing and check out to see if the agency belongs to any professional groups like the Better Business Bureau or the NFCC.  Ask these professional groups about how the agency is audited and if your money will be protected.   

Once you’ve decided on a service that can be trusted, credit counselors will then help build a program that’s right for you, such as a One-Pay Plan, while also helping you with the those scary calls from creditors.  As soon as you begin paying off old debt, it is recommended that you begin to set up a budget.  Yep!  There’s that word again.  Credit counselors can help with you with that too.