Okay, now we’re going to look at ways to take care of the creditors that just refuse to work with you on the interest rates or terms of your loan despite your best efforts to negotiate with them. After hanging up the phone, jump up and down and call them every name you think of. Maybe even create a few new ones. It won’t help your problem, but you’ll feel better. Now it’s time to unsnarl the mess.

One option might be to work with a credit counseling company. Some of these companies are real scam artists interested in emptying your wallet of what little you have left. So you will need to choose carefully or you can end up in worse shape than you started. Let me refresh your memory; businesses are in business to make money. The goal here is to be sure it isn’t off you.

A lot of the highly advertised credit counseling companies make their money off the poor distraught individuals who seek their help. Rumor has it that they sometimes charge upwards of $3000 for services. Hmmmm, let’s see how that works out. You owe $15,000 that you’re having trouble paying back, you go for help and end up owing $18,000. Do they think we’re imbeciles? Obviously they do. The sad part is they’re still in business. Just for fun, I called one such company on the Internet and, after being passed from one person to the next, I never was told how much they charge. They’re not interested in a writer knowing that. Fortunately, it’s easy to avoid these companies.

The first call you should make is to the National Foundation for Credit Counseling (NFCC) at 1-800-388-2227. They will refer you to a reputable credit counseling company in your area. You can also talk to your bank, the state Attorney General’s office, or the local branch of the U.S. Cooperative Extension Service.

If you play your cards right, there should be no charge for the credit counseling service. Your assigned counselor will give you advice and help you formulate a budget. If, however, you opt to have them represent you in negotiating with your creditors, you’re going to have to pay. To find out how much this will cost, I checked with the NFCC and was referred to Clear Point Financial Solutions. For a complete management program, I would pay them $35 a month if I could afford it. Please note I’m not endorsing this company, but rather giving you an illustration of how one such company operates. The NFCC may refer you to an entirely different company. The advantage to using a service like this is that they can often negotiate lower monthly payments and interest to something reasonable.

If you can solve your money issues yourself, that’s your best bet. With a little reading (there’s lots of good information on the net on money management and budgeting), a reasonable budget, maybe an extra job, cut up credit cards, and calling your creditors regularly, you can find your way out of trouble. The cost to you: a savings of $35 or more a month.

In the next post we’ll look at debt consolidation loans.