Singing The Debt Management Blues

It is so very easy to find yourself in debt up to your eyebrows. How you got there is important, of course, but how you are going to get out and be able to stop singing the blues is a more pressing question.

Maybe you haven't quite yet reached critical mass as far as debt goes, but when you find that you are rapidly approaching that point it is time to take action.

Remember this one point if you forget everything else: It is better for YOU to initiate contact with your creditors than it is to wait for them to contact you when you are having financial difficulty.

Debt actually comes in two very separate and distinct forms. The first is secured debt. Secured debt consists of things like your mortgage payment, you car loan payment and the payments you make on installment loans to banks or businesses for purchases of furniture or appliances where the item purchased is the collateral for the loan. That is…if you dont make the monthly installments, something can be repossessed — your house, your car, your refrigerator, your guitar, etc.

Unsecured debt is just what it says….unsecured. You have not used anything that you possess to secure the loan. Nobody can repossess anything. The only security that you have supplied is your signature on your credit card application where you agreed to their terms of service and their interest rates.

So why do you have to pay these unsecured loans at all? The truth is that you don't. The credit card companies can't really do anything about it except make your life miserable and report you to credit reporting agencies.

But you want to do something about it. You need to keep your credit standing good and you need to pay what you owe. You can work things out if you just initiate the conversation.

Tags: debt management, personal debt, financial problems, managing personal debt, personal financial problems, good debt management, no credit crunch