Start with Your Own Credit Report, Call Creditors, Do some Consolidation.

Start by taking an inventory of all of your debt. Download or send for your credit reports and look them over very carefully. If you find there are errors on your report, such as debt that has been cleared but has not been taken off your report or charges for items or services that you did not purchase, make some phone calls to get them cleared away.

Call creditors and negotiate your monthly payments. Most are willing to work with you, to prevent losing all the money in a bankruptcy. Always get the agreement in writing before sending out the first payment. If creditors seem less than willing to negotiate, move into the next phase.

If you have done all you can do and debt remains, call a loan consolidation company. If you can find a company that offers a low interest loan and debt counseling to prevent future problems, you are getting somewhere. There are debt consolidation companies offering to talk to your creditors to lower or take debt off your report. They add remaining debt together and offer to deal with these payments for you. The idea is that you pay them one monthly fee plus a payment that covers the rest of your debt. If they did indeed get much of your debt cleared, this option may be beneficial.

If all the above still has you stretched beyond capacity, there are other things to consider. Taking a second job, shutting off the unnecessary luxuries, (such as HBO or kids cell phones), writing down a budget - and analyze every dime being spent. Cutting up credit cards and being frugal in shopping are other ways in which expenses can be cut dramatically. Make a consistent attempt to pay more than minimum on any loans, and pay off the smaller debts first. Do not declare bankruptcy unless it cannot be avoided.