Coping with Debt
Are you feeling overwhelmed by debt? Do you feel your
studies are suffering because you're worried about your
bills? These are signs of a serious debt problem. If this
sounds like you, it's time to get the debt under control.
Try taking these steps.
- Step One. If you are in debt to a few businesses, call
them and try to negotiate for smaller payments—at least
for a while. Call them before you miss a payment. This
may be difficult to do, but it's less embarrassing than
receiving telephone calls from creditors demanding
payment. And, the businesses may be more willing to
work with you because you are showing them your
willingness to pay them back.
- Step Two. Use a debt recovery worksheet. (hot link to
the debt recovery worksheet). List how much you owe to
each creditor and how much you will pay each month. A
ways try to make more than the minimum payment. If you
make steady payments, you will see the amount owed go
down. Put your worksheets in order, starting with the
highest interest rate and going to the lowest.
- Step Three. If you owe many businesses, it may be time
for outside help. Start with your college's financial aid
office. They may have special debt counselors who help
students with debt problems. Or, consider working with
a nonprofit debt counseling service, such as Consumer
Credit Counseling Service. They can help you set up a
repayment plan with your creditors.
- Step Four. Review your spending plan. Look for ways
to cut expenses wherever possible. For example, can you
carpool to school instead of driving? Can you trade baby
sitting instead of paying for child care?
- Step Five. Try to find ways to increase income. If you're
not already participating in a work-study program, you
may want to consider it now. If you're not working,
consider a part-time job. If you're already working part-time,
could you work a few extra hours a week? Just be
careful not too work so many hours that your studies