I hope you read this article before you sign up for an expensive program or spend money on expensive books or information packages.



First of all, it is important to give yourself a pat on the back for simply reading this article in the first place. The first step to finding a solution is admitting that you have a problem. A good many people simply get themselves deeper and deeper into trouble and debt because they do not want to admit they have a problem. Or worse, they know they have a problem but do not want to let those closest to them know that the problem is serious.

Second, you may take comfort in knowing that you are not alone. Credit problems are a growing epidemic across the globe today. Banks make it all too easy to obtain credit and to quickly accumulate debt and most people today are not really taught how to manage their money. Add to this a high-consumption society obsessed with various status symbols from clothing to cars and you have a sure-fire recipe for disaster.

Finally, and most important, you can repair your damaged credit and you can do it yourself for free.

The first and most important step is to collect all your information in one place. This includes how much you owe on each credit card and the details such as interest rate and minimum payment.

Now, call each of these credit card companies and close the account. Then cut up each card. This is important. First, you are eliminating your ability to rack up more debt and forcing yourself to face up to the reality of living within your means. But you are also taking the first step to handling your current situation. It is better on your credit report if you have closed the account while still in good standing.

Now comes the more difficult and challenging period. Handling the money you owe itself. For the first month do not make any credit card payments. Not even minimum balances. If you have money you planned for this purpose then set that money aside. Before you can begin addressing your debt you will also need to make arrangements for you daily life. You need to make a realistic budget that fits your income and then live within it. This is how you will avoid accumulating more debt in the future.

Once you have a good handle on your situation--you know your income, you know your budget, you know your debt--it is time to look at how you can solve the problem. You may find that you want to work with a law firm or agency, but my personal experience is that you are better off making that your last resort rather than your first. They can be very expensive and usually charge you based on a percentage of your debt -- so the more you can do to cut down that debt the more money you will save.

So what can you do yourself? A lot! Perhaps you can save one-third to one-half of your debt within a few months or acquire that amount through a home equity loan or some another financial maneuvering. Once you have some money on hand and you have let your credit card payments lapse for at least a month it is time to get to work. Call the company and tell them that you are in financial difficulties. Think up all your sad stories ahead of time so you have them handy and clear in your mind. Then tell the company that you are looking at various options including bankruptcy and working with a program but would really like to do this yourself (believe me, most companies would rather deal with you than a lawyer or professional negotiator). Then offer to pay one-third of what you owe. Some companies may work with you over the next months (while you are hopefully saving still more money) and eventually settle for an amount much less than what you originally owed. Others may offer a special program. There may also be a few companies that will not work with you in any way. If you run into those then you may want to call in professional help or just simply pay them off.

It will not be easy and it will likely be stressful, but in the end you can save yourself a whole lot of money and your credit will be looking good again. You can repair your credit yourself and give you and your family a bright future.