The best way to handle debts is to avoid them in the first place. But we all know for the majority of families,that is very difficult to do. If you answered "YES" to 2 or more of the statements at the beginning of this lesson, then it's time for you to act and do something to better manage your debt load.

Credit Card Debt	$ Select One 0 1 - 2,499 2,500 - 4,999 5,000 - 7,499 7,500 - 9,999 10,000 - 12,499 12,500 - 14,999 15,000 - 19,999 20,000 - 29,999 30,000 - 39,999 40,000 - 49,999 50000+
Other Unsecured Debt	$ Select One 0 1 - 2,499 2,500 - 4,999 5,000 - 7,499 7,500 - 9,999 10,000 - 12,499 12,500 - 14,999 15,000 - 19,999 20,000 - 29,999 30,000 - 39,999 40,000 - 49,999 50000+
Number of Creditors	Select One 2 3 4+
Status of Bill Payments	Select One Up to Date About to Fall Behind 1 Month Behind 2 or More Months Behind
I want to	Select One Eliminate My Debt Consolidate My Debt Seek Advice
Own a Home?	Yes  No

If you did not complete the worksheet in lesson 2, use it with this lesson---

1. Make sure you know who you owe and how much you owe them. List each creditor ( loan company, bank, department store, family members, the total balance owed, the date the monthly payment is due, the number of payments left, the amount of the monthly payment, the due date, and any amount that is past due. Total the balance owed, then add your monthly payments.
   
   
2. Look for ways you might increase your income or decrease your spending. Try to free up some income so you can make your pay- ents. You might want to re-read lesson three for tips on reducing your spending leaks.
   
   
3. Do not use any more credit until you are in better financial shape. Try hiding those credit cards so you won't be tempted to use them. You may even need to cut them up! That's just exactly what some budget counselors make their clients do before payments are adjusted.
   
   
4. If you see you will not be able to make your payments, by all means, contact your creditors. DO NOT IGNORE THEM !! If you don't contact them about your financial difficulties, and don't make scheduled payments, your account may be turned over to an independent collection agency. However, many creditors--if they know the facts about your financial problems and are convinced of your intent to pay--may agree to defer payments or refinance the debt to reduce the size of your monthly payments. Many are willing to make some other kinds of arrangements with you.
   
   

   To be helpful, creditors must know of your problems BEFORE your payments are overdue. Avoiding them is the WORST thing you can do. Above all, BE SURE TO KEEP YOUR WORD. If creditors are willing to help you out, be sure you follow through as you say you will.
   
   

5. Contact a consumer credit counseling service for some help. Your County Extension office can provide you with some budget counseling advice and information, but is not able to mediate your payments with creditors.