How do I manage my debt?

You may have seen ads for debt consolidation companies who claim to reduce your overall debt and negotiate with your creditors. While there are good companies who do this, there are also a lot of scams. What happens is that you may end up paying less to creditors, but the company will charge you fees, which means over time, you owe just as much, if not more, than your original debts. 


If you do have some money to pay on debts, but can’t pay everything at once, look into working with a non-profit credit counseling agency such as Apprisen. They may be able to help you lower interest rates and work out a repayment plan that fits your budget. While there are fees for this service, it is based on your income, and some clients end up not paying anything for the help. You can learn more about Apprisen’s debt management program here. 


Non-profit credit counseling agencies like Apprisen, and many local United Ways, also provide budgeting and financial coaching that can help you stay on your feet financially. You can learn more by checking out your local United Way or calling 211.


Another option for managing debt is to work directly with your creditors. This is a great choice if you only have a few debts. It is possible they will reduce interest or cancel late fees if you can agree to a payment plan that you can live with.


It is important to make sure you can actually make the payment. Do not agree to something that you can’t afford. Sometimes you can feel a lot of pressure during a collection call, and it can be tempting just to agree to something without knowing whether or not you can stick with it. Don’t allow a creditor to pressure you into something you really can’t afford. 


If you agree to a payment arrangement, it is likely they will want your bank information to automatically take the payment out of your account each month. It can be difficult to stop these payments once they start, and your bank may charge you a fee to stop them, so be sure you can live with any payments you set up directly with a creditor.