It happens to everyone, at least once in their adult life.  Something happens, and your finances end up out of control.  This could be something as major as the death of an income earner or divorce, or as minor as just being a day or two late on a credit card or utility payment.  The end result is usually a lot of harassing phone calls, mounting debt, and a loss of hope.  The aim of this hub is to help get you on the road to retiring your debt.

This is not a sales pitch, or a recommendation of any company or program. This is an adaptation of my story, made generic for everyone’s benefit.

 We had simply been a few days late on a single payment on one of the credit cards, and the next month we discovered that the interest rate had shifted to the default rate on all of our cards.  In some cases this was over 30%.  This is known as ‘universal default’.  This, coupled with the new doubling of the minimum payment sent the monthly minimums through the roof.  We could not afford to pay the cards and feed our kids, so we fed the kids and let the card payments slide.  We realized we needed to get things in order, so we contacted a consumer credit counseling service.  This stopped the calls, and got us on a payment plan we could afford, and also lowered the minimum payment.  Since then we have gotten all but 3 of the accounts paid off, our credit score has increased, and we are on the verge of being approved for a mortgage.

This is a typical case, though the story is over a year in the telling.  There is NO overnight fix.  Anyone who says they can increase your credit score in a matter of days is probably being dishonest.

In summation, here are some bullet points to remember.

· At the first sign of trouble (job loss, missing a payment) call all your creditors and see if you can get your interest rate lowered. Credit card companies are more flexible than mortgage holders. Some credit card companies will flat out refuse you, but you must try.

· Call a consumer credit counseling service. They will help you; it’s what they do. There may be a small fee included with the first payment.

· Prioritize your monthly bills:

1. Rent or mortgage. (You need a roof over your head)

2. Car loans. (No car=no job in most cases)

3. Food and living expenses. (Gas, water, electric – Ask about a payment plan with utilities)

4. Credit card and other debt (These are the most flexible, in most cases)

· Reduce your discretionary expenditures. (Eat out less, rent DVD’s instead of going to movies, etc.)

·KEEP THE ARANGEMENTS YOU’VE MADE!

 This is not intended as investment or financial advice; it is just a way of letting you know how my family dealt with a similar situation. If you feel it necessary, do not hesitate to enlist the services of a licensed financial advisor or competent attorney.

Best of luck.