I Need to Borrow Some Money to Get out of Debt

Well, if you really think  " I need to borrow some money to get out of debt ", you're probably right!  Thing is, you need to do just a little homework to get ready.  Plus, who do you talk to? We can help there, too! 

The obvious first step is you need to design a get out of debt plan.  So lets look at how you might do that.

Help yourself

Developing a Budget: The first step toward taking control of your money 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, auto payments, and insurance premiums. Next, list the disbursements that change — like entertainment, recreation, and clothing. Writing down all your disbursements, even those that seem trivial, 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 city library and bookstores have info about budgeting and money management proficiency. In addition, computer software programs can be useful instruments for developing and sticking with a budget, balancing your checkbook, and following plans to save money and pay down your debt.

Credit Counseling:

If you’re not self motivated enough to create a workable budget and stick to it, can’t work out a repayment plan with your creditors, or can’t keep track of mounting debts, consider contacting a credit counseling organization. Many credit counseling institutions are nonprofit and work with you to solve your financial 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 groups charge high fees, which may be hidden, or urge customers to make “voluntary” contributions that can cause more debt.

Most credit counselors offer services through local offices, the Internet, or on the phone. 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 money institution, local consumer protection office, and friends and family also may be good sources of information and advise.

Honest credit counseling institutions can advise you on managing your money and debts, help you come up with a budget, and make available 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 money state of affairs with you, and help you develop a personalized plan to solve your money troubles. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.

Debt Management Plans:

If your financial issues theme from too much debt or your inability to repay your debts, a credit counseling office may urge 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 fiscal state of affairs, and has offered you customised advice on managing your money. Even if a DMP is right for you, a well known credit counseling organization still can help you create a budget and teach you money management skills.

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 concessions 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 accomplish. Ask the credit counselor to estimate how long it will take for you to complete the plan. You may have to agree not to apply for — or use — any added credit while you’re active in the plan.

Protect Yourself

Be wary of credit counseling organizations that:

charge high up-front or monthly fees for enrolling in credit counseling or a DMP.

pressure you to make “voluntary contributions,” another name for fees.

won’t send you free information about the services they provide without demanding you to provide personal debt information, such as credit card account numbers, and balances.

try to enroll you in a DMP without spending time reviewing your financial situation.

offer to join you in a DMP without teaching you budgeting and money management skills.

demand that you make payments into a DMP before your creditors have accepted you into the program.

All the best to you!