Free Money to Get Out of Debt ?

Sorry, there's no such thing as free money to get out of debt.  But, there is a lot of help available.  Here's some free advice:

Help yourself

Developing a Budget: The first step toward taking control of your debt situation is to do a realistic appraisal of how much money you take in and how much money you spend. Start by listing your income from all sources. Then, list your “fixed” expenses — those that are the same each month — like house payment payments or rent, automobile payments, and insurance premiums. Next, list the disbursements that vary — like entertainment, recreation, and clothing. Writing down all your payments, even those that seem insignificant, is a helpful way to track your spending patterns, identify necessary payments, 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.

Your town library and bookstores have info about budgeting and money management proficiency. In addition, computer software programs can be useful tools for developing and keeping a budget, balancing your checkbook, and creating plans to save money and pay down your debt.

Contacting Your Creditors:

Contact your creditors now if you’re having difficulty making ends meet. Tell them why it’s hard for you, and try to work out a new payment plan that reduces your payments to a more manageable amount. Don’t wait until your accounts have been turned over to a debt collector. At that stage, your creditors have given up on you.

Dealing 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 sanction of the calls. Collectors may not hassle 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.

Managing Your Auto and Home Loans:

Your debts can be unsecured or secured. Secured debts usually are tied to an asset, like your auto for a car loan, or your house for a mortgage. If you stop making payments, lenders can repossess your auto or foreclose on your home. Unsecured debts are not tied to any asset, and include most credit card debt, bills for medical care, signature loans, and debts for other types of services.

Most automobile financing agreements allow a creditor to repossess your car any time you’re in default. No notice is required. If your auto is repossessed, you may have to pay the balance due on the loan, as well as towing and storage costs, to get it back. If you can’t do this, the creditor may sell the car. If you see default imminent, you may be better off selling the auto yourself and paying off the debt: You’ll avoid the added costs of repossession and a negative entry on your credit report.
If you fall behind on your home payment, contact your lender at once to avoid foreclosure. Most lenders are willing to work with you if they believe you’re acting in good faith and the state of affairs is temporary. Some lenders may reduce or suspend your payments for a short time. When you resume regular payments, though, you may have to pay an additional amount toward the past due total. Other lenders may agree to change the terms of the home payment by extending the repayment period to reduce the monthly debt. Ask whether additional fees would be assessed for these changes, and calculate how much they total in the long term.

If you and your lender cannot work out a plan, contact a housing counseling office. Some agencies limit their counseling services to homeowners with FHA mortgages, but many offer free help to any homeowner who’s having issues making home payment payments. Call the local office of the Department of Housing and Urban Development or the housing authority in your state, city, or county for help in finding a legitimate housing counseling bureau near you.

Credit Counseling:

If you’re not disciplined enough to create a viable budget and stick to it, can’t work out a repayment plan with your creditors, or can’t keep track of mounting bills, consider contacting a credit counseling organization. Many credit counseling institutions are nonprofit and work with you to solve your fiscal worries. But be aware that, just because an organization says it’s “nonprofit,” there’s no guarantee that its services are free, affordable, or even legitimate. In fact, some credit counseling companies charge high fees, which may be hidden, or urge customers to make “voluntary” contributions that can cause more debt.

Most credit counselors offer advise through local offices, the Internet, or on the telephone. If possible, find an organization that offers in-person counseling. Many schools, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your fiscal institution, city consumer protection office, and friends and family also may be good sources of information and advise.

Reputable credit counseling groups can advise you on managing your money and debts, help you come up with a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire debt situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an provide of follow-up sessions.

Debt Management Plans:

If your money troubles root from too much debt or your inability to repay your debts, a credit counseling agency may suggest that you join in a debt management plan (DMP). A DMP alone is not credit counseling, and DMPs are not for everyone. You should sign up for one of these plans only after a certified credit counselor has spent time thoroughly reviewing your debt state of affairs, and has offered you personalized advice on managing your money. Even if a DMP is right for you, a reputable credit counseling organization still can help you create a budget and teach you money management techniques.

In a DMP, you deposit money each month with the credit counseling organization, which uses your deposits to pay your unsecured debts, like your credit card bills, student loans, and medical bills, according to a payment schedule the counselor makes with you and your creditors. Your creditors may agree to lower your interest rates or waive certain fees, but check with all your creditors to be sure they provide the reductions that a credit counseling organization describes to you. A good DMP requires you to make regular, timely payments, and could take 48 months or more to complete. Ask the credit counselor to estimate how long it will take for you to finish the plan. You may have to agree not to apply for — or use — any extra credit while you’re participating in the plan.

All the best to you!