Ramsey County

Making $ense of Dollars and Cents

February 9, 2009

Debt Management in Tough Times

            At any time, managing bills and debts is difficult, but with current economic conditions, it can almost reach a crisis point. Debt management involves developing one or more strategies to help a debtor get that debt under control.   The eXtension web site, http://www.extension.org, offers some excellent advice on management for today’s situation.

            Should you shop for a lower interest rate on your debt?

• This can be a good option, if it substantially reduces your monthly payments and the refinancing is not too costly. Inquire whether other higher cost debts can be rolled into the lower cost loan.

            What if you can't pay your bills?

•First of all, prioritize your debt. Keeping a roof over your head is most critical. Keeping up with car payments may be next in line, if that transportation is needed to keep a job.

• Maintain payments to as many creditors as possible.  If you have to make a late payment or miss a payment, contact the creditor as soon as possible to work out a plan for getting back on track.

•           Where can I find advice on repaying debt?

 Contact the National Foundation of Credit Counseling (www.nfcc.org or 1-800-388-2227) for help finding a reputable credit counseling service. These organizations can work with you to develop a repayment plan and also provide financial management education.

            Use your credit to keep it available.

• Access to credit may be helpful in tight times, allowing you to manage unforeseen expenses such an emergency home or car repair.  Just be sure to evaluate how using credit now will affect your budget in the future. • With a good credit history, you may be able to work with existing lenders to lower your interest rate and negotiate better terms for existing loans.

            Use “surprise” dollars to pay debt

• When you receive gifts of money, get a bonus or pay off a debt, use the extra money as “power payments” to pay down your remaining debt.

•           Make the most of your credit cards

 Make certain you are getting any available perks associated with your credit cards, such as credit toward payments, points toward frequent flyer miles or gifts that could be used for upcoming occasions.

Go to Making $ense of Dollars and Cents Index
Go to Ramsey County Extension Service Home Page

524 4th Ave NE #5, 2nd Floor Ramsey County Courthouse
Devils Lake  ND  58301
701-662-7027
email - NDSU.Ramsey.Extension@ndsu.edu