There is no such thing as a quick and easy way to get out of debt, but there are realistic steps you can take to get debt under control.

Develop a budget: Assess how much money you make and how much you spend. Writing down all your expenses is an easy way to get a realistic picture of where your money goes. Your goal should be to make sure you can pay for the essentials, like food and shelter, with enough left over to tackle your bills.

Contact your creditors: If you’re having trouble making payments, you may be able to work out a modified payment plan with your creditors. Let them know right away if you’re struggling before the accounts get turned over to debt collectors. If your accounts do get turned over to debt collectors, this video from the Federal Trade Commission can help you understand your rights.

Look into debt relief services: Credit counseling could help you set up a plan to pay off your debts. Even though many credit counseling groups are nonprofits, their services aren’t necessarily free.

Get more tips for managing your debt.

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More than one and a half million people file for bankruptcy every year. Many people fall behind on their bills because they’ve lost their jobs, suffered from a long-term illness, or because they were unable to manage their personal finances properly.

Fortunately, there are many resources out there that can help you put together a plan to pay off your debt, including credit counseling agencies.

Signs Your Finances Are in Trouble

You don’t have to be close to filing for bankruptcy to realize that you are in financial trouble. These are some signs that you might have too much debt:

• You are frequently late on your payments
• You are close to your credit limit on your credit cards
• You use your credit cards to make payments on other cards
• You find it difficult to save money
• You’ve been denied credit recently

How to Get out of Debt

To get out of debt and set your finances straight, carefully analyze your income and expenses. Make sure you:

• Make a budget and stay within its limits.
• Figure out your total debt and also what you owe to each creditor, your monthly payments, interest and payment due dates.
• Prioritize repayments, focusing first on things such as your mortgage, rent, and utilities.
• Make a repayment plan for each creditor and determine how long it will take you to pay off the debt. Make sure to review your credit card statements, as they will include information about how long it will take to pay off your balance, per new credit card laws that went into effect in 2010.
• Don’t incur any additional debt.

How to Choose a Credit Counseling Agency

Consider a credit counseling agency if your debt is too much to handle. These companies offer workshops on how to manage your money and advice on how to administer your debt. They can also help you create a budget and even negotiate your debt with creditors.

Many of these companies are nonprofit organizations, however be careful, as some charge excessive fees for their services and others might not even deliver what they promise. Consider these important suggestions before choosing a credit counseling agency:

• Pick a counseling agency that offers several services. This will help you avoid organizations that promote only certain services.
• Avoid credit counseling agencies that charge you for simply providing information, or agencies that demand a percentage of the amount that you are supposedly saving. Ideally, you should request the cost of their services in advance and in writing.
• Stay away from agencies that ask you to stop making payments on your debt or ask you not to contact creditors.

The Department of Justice has a list of credit counseling agencies that are approved to provide pre-bankruptcy counseling.

Over the next few days, we will be sharing tips to help you stick to some of the most common New Year’s resolutions that we make every year. Today we’re sharing tips on how to get out of debt.

Do you want to take control of your debt in 2012? Many people face a financial crisis at some time in their lives because of personal or family illness, the loss of a job, or overspending. It can seem overwhelming, but debt can often be overcome. 

There is no such thing as a quick and easy way to get out of debt. Turning to a business that offers help in solving debt problems may seem like a reasonable solution when your bills become unmanageable. But before you do business with any company, check it out with your state Attorney General, local consumer protection agency, and the Better Business Bureau.

The good news is that there are realistic steps that you can take to get your debt under control.

Develop a Budget

Do a realistic assessment of how much money you take in, and how much money you spend. Start by listing your income from all sources, then, write down all your expenses, even those that seem insignificant. This will help you track your spending, identify necessary expenses, and prioritize the rest. The goal is to make sure you can make ends meet on the basics: housing, food, health care, insurance, and education.

Contact Your Creditors

Contact your creditors immediately if you’re having trouble making ends meet. Tell them why it’s difficult for you, and try to work out a modified payment plan that reduces your payments to a more manageable level. Don’t wait until your accounts have been turned over to a debt collector. At that point, your creditors have given up on you.

Deal with Debt Collectors

The Fair Debt Collection Practices Act is the federal law that dictates how and when a debt collector may contact you. A debt collector may not call you before 8 a.m., after 9 p.m., or while you’re at work if the collector knows that your employer doesn’t approve of the calls. Collectors may not harass you, lie, or use unfair practices when they try to collect a debt. And they must honor a written request from you to stop further contact.

Manage Your Car and Home Loans

If you stop making payments, lenders can repossess your car or foreclose on your house.

Learn more about managing your money and dealing with debt.