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 are affected.

Coping with Debt

Debt Recovery Worksheet Owed to: _____________________________
Interest Rate Amount Owed Monthly Payment Payment Due Date Amount Paid and Date