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Possibilities: A Financial Resource for Parents of Children with Disabilities

Overwhelmed with Debt

I’m Completely Overwhelmed with Debt. I Need Help.

If you feel completely over your head with bills you cannot possibly pay, call the National Foundation for Credit Counseling (NFCC) to get help. NFCC is a national non-profit whose mission is to instill positive financial behavior in consumers and help them get their debt under control. 

Making money off of your difficult situation is not on NFCC’s agenda, as it is with many other so-called credit-repair and debt-relief businesses making attractive promises to relieve you of your debt. NFCC helps you protect your credit and guides you toward debt solutions that improve your credit. Credit-repair and debt-relief companies don’t. 

Be careful who you work with. Many shady businesses promising to relieve you of your debt operate under the guise of a non-profit. Be assured they have found a way to legally make a profit off of your difficult situation.

Contact the National Foundation for Credit Counseling (NFCC)

NFCC has many offices around the country staffed with credit counselors prepared to help you manage your debt.

National Foundation for Credit Counseling (NFCC)
Call 1-800-388-2227
National Foundation for Credit Counseling
801 Roeder Road, Suite 900
Silver Spring, MD 20910

If you fear you cannot pay all of your bills and you don’t know which to pay first, the NFCC can also help you determine that.

What Are Some Things I Can Do On My Own to Reduce Debt?

Getting the big picture of how much you owe, and to whom, will help you gain a sense of order and focus on what you need to do to reduce your debt. In addition to paying your bills on time every month, and, if necessary, negotiating new terms with your creditors, there are several other things you can do. Get started by creating a debt reduction plan. 

Create a Debt Reduction Plan

What you want to try to do is accomplish little victories as you work to reduce your debt. You can do this two ways:

  • Pay off the debt with the highest balance(s) first
  • Pay off the debt with the highest APR(s) first

To help you make that decision, let’s first get the big picture of your debt. List all of your debt on the Debt Reduction Plan form that you can download below. Make note of low balance amounts, or balances with high APRs. Decide which balance makes the most sense to pay off first. Then, begin paying as much as you can to pay off that balance. Again, look for victories. Select a debt you think you can pay off in a short amount of time, then move on to pay off another one.

Tips for Making the Most of Your Debt Reduction Plan

  • Have you tracked your spending for seven days? What items can you do without? Small expenses add up over time. Refer to Track Your Spending Leaks for more guidance.
  • Review the list of expenses on your spending plan. Which ones can you do without? What lower-cost alternatives might be available?
  • Using your credit card is a quick fix when cash is tight, but it is an expensive one. Try to avoid using your credit card except for emergencies—events that affects life’s basic needs. For example, a basic need is reliable income so you can provide for your family. Let’s say your car breaks down, and it is the only way you can get to work—you’d risk losing your job without your car. This car break down is considered an emergency, and would justify the use of your credit card to get it fixed as soon as possible.
  • Work out realistic payment plans with the companies or persons to whom you owe money (hospitals, doctor’s office, the landlord, etc.).
  • Consider applying for and using a low-rate, low-cost credit card.
  • Stay on top of due dates for all of your bills and any collection notices. Pay something on each bill. Again, stay in touch with your creditors and try to work out a realistic payment plan instead of skipping a payment.

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