Sometimes the world seems a dark and threatening place, full of threats and dangers. It's tempting just to give up in the face of all the problems and walk away. Some do just that, posting the keys of their houses to the mortgage holders and camping out with friends. Others decide to fight for what is theirs. They know that every dollar they can scrape together and pay to reduce their debts saves on interest and avoids some of the penalty charges that might otherwise come their way. The difficulty, of course, is finding the extra dollars to pay. Many live from one payday to the next with nothing left over at the end of the month. Indeed, if there's an emergency, they can be forced into the arms of the payday loan merchants who charge egregious rates of interest on short-term loans. Those who have better luck take charge of their household budgets to find those extra dollars.
The first step is running a good set of accounts, recording where you spend every cent. That means some effort, writing down or using an electronic system to capture all spending. But, once you know where it all goes, you can start asking the hard questions. Is all your money being spent wisely? Can you find any way of cutting back? If you can find places where savings can be made, where cheaper alternatives can be found or, perhaps, where you can do without, every dollar saved can build up into real savings over the weeks and months. All it takes is the will power to make it happen. But, there comes a point where all the fat has been cut out and only necessities are left. If you still owe more than you can afford to pay, now is the time to start talking to all your creditors. All it takes is for some to reduce the rate of interest being charged or to waive some of the fees already imposed. In this, you have to remember that it does not help your creditors to force you into bankruptcy where all they will get is a few cents on the dollar. Everyone benefits over the longer term if you can avoid court action.
So how do you approach the negotiations? You have been improving your payment record because of your debt management. That has shown you are responsible and deserve a helping hand. More importantly, you have reduced your spending and can produce a detailed set of accounts to show where every cent is going. Once the banks and finance companies see exactly what is possible, the best terms for debt settlement can be worked out. If you do not want to do this yourself, there are professional counselors who can advise and help. Always check out advisors before trusting them with your case. There are some unscrupulous people out there waiting to take your money, so pick a non-profit organization with a good track record to help you. If you can work your way out of debt, your financial future will be secure.