If you are behind in paying your bills, no matter who you owe money to, you’re likely to get phone calls like that. However, just because you get such phone calls doesn’t mean that you have to take it. There are ways to stop the harassment once and for all.

Don’t Just Ignore Them

The first thing you need to do is to stand firm when these collection agencies call and not simply ignore them. It may seem easier at first to just ignore them and pretend that no one by that name is home or to screen your calls, however, ultimately, they will keep calling and the best thing to do is to engage with them.

The First Step to Get Them to Stop Calling

The next time these places call you, ask for an address to mail a check to. Get the name of the person you are speaking with as well and make sure to ask for the exact name of the collection agency. This is extremely important because oftentimes, your account may have been sold to someone else. So just because your credit card was originally with Chase Bank doesn’t mean that it’s still there. You need to get the correct name of the company that is making the collection calls and the correct mailing address.

Don’t be confrontational and threaten to sue at this point. Just be polite, ask for the information and write everything down. Be sure to note as well the time and date of the phone call and the incoming number if it displays on caller ID.

Write a Cease and Desist Letter

Now, you need to write what is known as a “cease and desist” letter. This doesn’t have to be written by a lawyer and it doesn’t have to be notarized. The letter is very simple and straightforward. Here’s a sample that you can adapt to your own needs:

To whom it may concern:

John Doe

Send the Letter via Registered Mail

The above letter should be mailed to the collection agency or collection agencies who have been harassing you and it should be sent via registered mail. It’s important to do use registered mail and to document any contact with them because once they have received this letter, they are no longer entitled to call you. This way, you have legal proof of everything that happened and when it happened.
If they continue to call you anyway, you may contact an attorney and arrange to sue them for damages. The courts will support you fully in this endeavor. Lawsuits against collection agencies that fail to comply with the fair debt collection practices act have been successfully prosecuted.

Important Note

Now before you start jumping for joy, you should be aware of an important caveat which we mentioned in the letter above: this letter will stop the collection agencies from calling you, however it will not change the fact that you owe them money. They can and often do initiate other legal action including filing a lawsuit against you. However, it will at least give you the peace of mind of knowing that the collection agencies can’t bother you anymore with annoying phone calls, which is a good start toward getting your life back together.

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George Gallagher is a personal finance blogger and works with cuStudentLoan, helping parents and students find the best options in their search for private student loans.

The Statute of Limitations for Debt

The statute of limitations for debt, simply enough, is the amount of time debt is relevant under the law. Before it expires, you can be successfully sued for unpaid debt. After it expires, you can still be sued, but as long as you make it clear that your debt is older than the statute of limitations (i.e. time-barred) the case will be dismissed.

Therefore, if a debt collector threatens a lawsuit against you when your debt is time-barred, you really have nothing to worry about. In fact, debt collectors are not legally allowed to threaten a lawsuit if they do not actually intend to sue, which means you might have grounds to report someone threatening a suit without grounds to actually bring it.

Still, the practical application of debt’s statute of limitations is somewhat complicated. First of all, the statute for written contracts, such as credit card agreements, varies depending on the state. So the first step in applying it to your particular situation is finding out the length of time your state considers debt to be legally relevant. Next, you must assess how old your debt is. To do this, simply determine the last time you made a payment toward your debt because debt’s statute of limitations begins at the time of last payment. Unfortunately, this also means that each time you make a payment, your debt re-ages and the statute of limitations begins anew.

To Pay or Not to Pay?

Thus, you are left with a dilemma: pay and lengthen the time your debt is relevant under the law, risking a lawsuit or keep the money in your pocket and hope that you won’t get sued before the state-mandated time limit runs out.

Considering that the statute of limitations for debt may be anywhere from 3-15 years, depending on the state, this is sure a tough choice. However, hopefully it’s one you won’t have to make. Without a doubt, the best course of action available to you is reaching some sort of payment agreement with your creditor. Doing so will both eliminate the chance of a lawsuit and provide a concrete plan for becoming debt-free, thereby lowering the stress and worry brought about by your indebtedness.

Debt Management vs. Debt Settlement

The two most common types of agreements you can reach with creditors are debt management and debt settlement.

Debt management involves establishing a payment plan where you make a certain monthly payment for a set number of months until your debt is paid down completely. If you choose this route, it’s important that the payments you agree to make are comfortably affordable because if you break the terms of a payment plan, a significant penalty APR will be introduced and you’ll likely be sued.

Debt settlement, on the other hand, is when whoever owns your debt (credit card companies often sell old debt to debt collection agencies) agrees to forgive a portion of it, in return for you paying down the rest, in full, immediately. This option allows you to become debt-free relatively quickly, but it’s also often financially difficult to manage. After all, most indebted consumers don’t have large sums of money just lying around.

Still, it’s worth a call to your credit card company or whatever debt collection agency has assumed your debt to gauge your options. These companies want to collect their money, preferably with the least hassle possible, so they should be willing to work with you if you express a commitment and desire to pay what you owe. Just make sure that you don’t sign anything that either waives your right to stop debt collectors from suing or resets the statute of limitations clock unless it’s part of a final agreement.

Interestingly, unless you can prove you’re insolvent, you have to pay taxes on forgiven debt. You must therefore factor this cost into your thought process before entering into a debt settlement agreement. The IRS considers forgiven debt income because it was borrowed and not paid back. So be on the lookout for a 1099 form after reaching a debt settlement agreement and pay the taxes you owe, no matter how sour a taste it might leave in your mouth. Paying taxes on forgiven debt is much better than having to pay the full amount forgiven. Besides, you do not want to transition from debt problems right into tax difficulties.

Final Thoughts

The path you choose in becoming debt-free is ultimately up to you. As long as you understand how the statute of limitations for debt works and the options you therefore have at your disposal, you’re in good shape. You must simply not allow the stress and confusion of credit card debt to confuse you or the hounding by debt collectors to intimidate you.

You must also avoid getting time frames confused. Consumers often think that the amount of time negative information about credit card debt stays on their credit reports also resets each time they make a payment. This is not true, as such information typically remains on your major reports for a period of seven years beginning 180 days after you first became delinquent. As opposed to the statute of limitations for debt, nothing resets this time frame.

In the end, as long as you know your rights, stand your ground and approach your situation strategically, you’ll have the best possible chance of avoiding a lawsuit and getting back to the black relatively unscathed.

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This article comes from Odysseas Papadimitriou, Founder of CardHub.com, a website that helps people find credit card deals and discounted gift cards.

To stop false advertising and deceptive practices in debt settlement industry, the Federal Trade Commission (FTC) has introduced a new set of laws. It is expected that with the help of the new laws, the American middle class families will get a fair deal from the debt settlement companies.

Let’s have a closer look at the new debt settlement laws introduced by the FTC.

No Upfront Fees

The debt settlement companies cannot charge advance fees to the debtors anymore. The following criteria have to be fulfilled before charging fees to the clients:

• The debt settlement company needs to settle at least one of the debts of the client.
• There has to be a written settlement agreement between the debtor and the creditor. The debtor must willfully agree to the terms of the settlement.
• The consumers have to make at least one payment to the creditor (as per the new settlement agreement) before the debt settlement company charges fees from them.

While creating their fee structure, the debt settlement companies must follow certain rules. Fee charged for a single debt must be in proportion with the total fee that would have been charged if all the debts of the client were settled. Many debt settlement companies charge a percentage of what the debtors save using their services. If a client has multiple debts, then the percentage charged should be the same for all the debts.

Dedicated Account Rule

The debt settlement companies have to ask the clients to keep their fees and savings (for making payments to creditors) in a dedicated account. However, the companies should make sure that the following criteria are met:

• The dedicated account must be maintained at an insured bank. Also, the debt settlement company must not have any association with bank. It cannot exchange cash with the bank (as referral fees).
• The client must have complete ownership of the funds.
• The client must have full right to withdraw the funds without being penalized.

Maintaining Complete Transparency

This rule requires the debt settlement companies to avoid misinterpretations while offering services to their clients. These companies need to make certain disclosures to the clients during telemarketing. This includes:

• Explaining the basic facts about debt settlement programs to the clients.
• Making the client aware of the possible length of the debt settlement program.
• Disclosing the approximate costs involved with the debt settlement program.
• Explaining the chances of success to the clients.
• Explaining the negative affects of debt settlement programs to the clients.

The above rules are applicable to for-profit debt settlement companies. If a debt settlement company claims itself to be a non-profit organization then it has to provide enough evidence in support of the claim. So the new debt settlement rules attempt to combat scam companies who pose as non-profit organizations.

People usually turn to debt settlement when they are knee deep in debt. Some unscrupulous debt settlement companies take advantage of this situation and deceive the consumers with false promises. Scams companies push many debtors towards bankruptcy. With the new debt settlement laws, the FTC is aiming to protect the consumers from this type of fraud. Let us wait and see if the new laws succeed in protecting consumer rights.

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This is the guest post by Michelle Davis, she is also a financial advisor and guest author for acclaimed blogs. Michelle has been writing on the topic related to debt settlement, bankruptcy law for more than five years and helping people to get wise with their money. Her interests include attending financial seminars, writing columns and visiting personal finance blogs.

The Real Cost of Borrowing Money to Buy a House

The average house price in the US in 2011 is $272,200 and the median price is $222,600 so let’s say you are buying a house worth $250,000 and you are taking out a mortgage to do so. With an average annual percentage rate of 4.8% which accounts for the cost of rates, points, private mortgage insurance and other lending costs, your home loan would look like this:

• Loan amount $250,000.
• Loan term 30 years.
• Monthly repayment $1,311.
• Total interest paid over the life of the loan is $222,200.
• When you borrowed money to buy your house, you increased the cost to $472,200.

When you borrow money to buy a house, you pay almost double the purchase price over the term of the loan. However, you are able to cut the costs of borrowing to buy a home in a number of ways.

If you make additional repayments to your home loan, you reduce the principal amount owing, and therefore less interest is charged to you. for example, if you were to pay just an extra $100 each month on the above loan, you would save more than $36,000 in interest and 4 years and 3 months off the term of your loan.

You should also make sure to find the cheapest interest rate on your mortgage at the time you apply, because even an interest rate which is just half a percent more can cost you in the long term. For example, if you took out the above loan with a 5.3% interest rate, your monthly repayments would jump to $1,388 and the total interest you will have paid will be $249,775. This means the total amount you will have to pay back will increase to $499,775.

Using an offset account in conjunction with your home loan can also save you on the costs of borrowing. An offset account is a transaction account linked to your home loan, where you can deposit all of your income and other savings. The balance in your offset account reduces the loan amount which attracts interest. For example, if your loan is for $250,000 and you have $10,000 in your offset account, you are only charged interest on $240,000.

The Real Cost of Borrowing Money to Buy a Car

Most of us spend just as much time in our cars, as we do in our homes, so it makes sense that you would want to buy a car which is a nice place to be. Therefore, if you were to spend $20,000 on a new car, and sought financing to make the purchase:

• Your interest rate is 9%.
• You will pay sales tax of $1,400.
• There will be additional fees of $40.
• The total purchase price of the car has gone up to $21,440.
• You make a down payment of $1,500 which brings your loan amount down to $19,940.
• Your repayments over the 48 month loan term are $496.
• During your loan term you will have paid $3,878 in interest.
• This means the total cost of borrowing to buy a new car is $23,818.

To save on the cost of borrowing to buy a new car, you can trade in your old vehicle. This reduces your loan amount, and therefore also reduces the amount of interest you pay on your car loan. For example:

• Your interest rate is 9%.
• You will pay a sales tax of $1,050.
• There are additional fees of $40.
• This means the total purchase price of the car is up to $21,090.
• You make a down payment of $2,500 which comprises your $1,500 cash, and the $1,000 difference between the trade in price, and the amount owing on your previous car loan.
• This means your loan amount is now $18,590.
• Your monthly repayments are $462.
• During your loan term you will have paid $3,615 in interest.
• This means the total cost of borrowing to buy a car when you have a trade in is $22,205.
• That is a saving of over $1,600.

The Real Cost of Borrowing Money to Buy a Television

There are so many great new things you want for your home when you go to a department store, that many businesses will now offer in store finance options, so you can take your purchases home on the spot, and pay them back over time.

In store finance is one of the highest interest forms of borrowing, so the true cost of borrowing money to purchase a $3,000 television for example, can be:

• A $3,000 purchase price.
• A 19% interest rate.
• A loan term of 4 years.
• Your monthly repayments are $89.70.
• Over the loan you will have paid over $1,305 in interest.
• This means the real cost of your television was over $4,300.

However, if you are able to pay off your in store finance sooner, with a loan term of just three years, you will make monthly repayments of $109.97 and pay just $958 in interest. That is a saving of almost $350 in just one year.

Many in store finance offers will also offer you an interest free period promotion, where your purchase does not attract any interest for the first 12 months for example. If you can find this type of finance, and pay $250 each month for 12 months, you will have repaid the television in full and it will have cost you $0 in interest.

Therefore, while borrowing money is an inevitable course of action when we want or need things in our lives, there are ways to reduce the cost of borrowing, and bring the true cost of our purchases back in line.

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Alban is a personal finance writer at Home Loan Finder, a home loan rates comparison website.

Don’t Put It Off

As soon as a medical bill arrives, get in touch with the doctor’s office or hospital. They work on a daily basis with people who have trouble paying their bills. Arrangements could be made to pay the debt off in increments instead of all at once. Ignoring the problem won’t make it go away; it’ll just force them to take action. They’re owed a debt and have a right to collect. Make it easy on both of you by dealing with the situation as quickly as possible.

Look for Payment Options

Doctors and hospitals are used to dealing with insurance companies. They’re also used to treating people who aren’t completely covered by insurance. Payment plans can usually be worked out but be sure the plan you agree to is reasonable and something you can budget for. Even if you agree to pay only $10 per month–the important thing is that you agree to pay something. If you set up a payment plan and get behind, be sure to let the creditor know that you’re in trouble. They may be willing to renegotiate your payment plan.

Ask for a Reduction

If you don’t have insurance, you may be able to get your doctor or hospital bill reduced. Many health care facilities have two different rates–one for people with insurance and one for people with no insurance. If rates like that aren’t in place, you may have to ask for a reduction. You can do so with a written request or by calling the billing department of the facility you owe money to. Explain that you have no insurance, but that you are very eager to get the bill taken care of. Then, ask if they would be willing to provide reduced rate or a percent discount.

Don’t Be Afraid to Ask for Help

Unexpected medical bills, especially if they’re the result of an ongoing problem that causes stress, such as a terminally ill family member or a child with a disabling disease, are particularly difficult to handle. The double whammy of dealing with the money problems on top of the emotional trauma could be eased by receiving help from a charity program. Many hospitals can assist by giving you contact information for available charities. There are also government programs that could help. Don’t be afraid to ask for financial aid. It’ll free you up to concentrate on the care and healing of your loved one.

Settlement Options

If worst comes to worst and you find yourself truly unable to meet your financial obligations, consider offering to settle the account. A lot of doctors and hospitals will be willing to take a partial payment so they can clear their books. They frequently contract with collection agencies for unpaid medical bills and receive only a portion of the original bill anyway. They’re further ahead dealing directly with you. Don’t be ashamed to approach them and ask for a settlement. You won’t be the first to do so.

Medical Bills and Your Credit

Paying off a medical bill or making arrangements to do so as soon as possible is advisable. Hospitals and physicians have no qualms about sending your debt to a collection agency. If your medical bill is delinquent, sent to collections, or charged off, it will hurt your credit score. You can also lower your credit score if you settle for less than you owe. Settling is not the same as getting a reduced rate, so contact the medical office as soon as possible if you would like to pay less than the amount due. A reduced rate will not harm your credit score like settling would.

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Guest post from Bailey Harris. Bailey writes about health insurance companies, finance, and related topics for www.healthinsurancequotes.org.

According to the Federal Reserve consumer credit statistics for 2010, the amount of debt Americans bear on their credit cards totals $2.4 trillion. That’s slightly down from a high in 2008, but still a significant amount. Millions of people need to reduce their balances in order to get out of paying ridiculously high interest rates that are just like throwing money away when you pay for them.

The sooner you are capable of getting out of debt, the better. So here are some top tips that can help you to reverse the damage that is done by getting too deep into debt.

Get Your Money in Paychecks – Credit experts believe that there’s a psychological effect to actually holding real money in your hands. Try getting your salary in paper checks, and take that money to the bank. Then you can put money into your savings account as opposed to checking for money you need to pay off your balances.

Do You Need Debit Cards? – Debit cards may be even worse for you than credit. Many people do not pay attention to how much things really cost when using plastic. Think about it: that debit card in your wallet is directly connected to your bank account, and you can take money out whenever you want. D o you really need to access your cash like that?

Pay Off the Highest Balances with the Highest Rate – Start with your balances with the highest rate first, then go by balances. You need to eliminate as fast as possible the ridiculous interest rates that you are paying. Again, its money that can be better spent elsewhere so get rid of it as fast as you can! That’s what trips people up.

Consider Consolidation – The easiest way to do this is to transfer balances. Remember, you will have to pay a percentage fee to do this, but to go to a low or even zero percent introductory offer may be a better deal. If you’re credit is so bad you cannot do this, try calling your financial institutions. They deal with these types of problems every day so negotiate with them!

Eliminate the Unnecessary – There are a lot of things that we pay for we don’t really need. Stop going out to eat so much. For the most part, it’s not good for your health anyway. Take a look at monthly subscriptions that you don’t need for magazines, or even cable. Netflix will stream content for you whenever you want for $8 plus your internet costs, and that’s much cheaper.

Opt Out of Credit Card Offers – No matter what the deal is, you don’t need any more credit cards. The reason why companies are able to offer bonuses and low rates to people is because those who get into trouble with debt essentially pay for these services through atrocious credit card rates. If it’s not a balance transfer that allows you to avoid crushing interest, it’s worthless to you. Opt-out here.

Budgeting 101 – OK, it’s hard to stick to a budget. But do you know how much money you are bringing in versus how much is going out? The answer to this might lead to why you are in the position you’re in. Just find out how much your expenses are every month. And again, these expenses should be things that you actually need, not cable TV. You don’t need that to survive.

Get Creative! – Try to make this credit card problem as fun as you can. Find yourself some cheap hobbies. Art, musical instruments and cooking are cheap things to do. So are many sports. Find productive habits that don’t focus on consumerism. You might be surprised at what you learn about yourself as opposed to thinking you need more clothing or gadgets to make you happy.

Remember: paying off debt fast is possible, and you can do it, just make the problem into an opportunity.

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Daniel Cawrey is a freelance writer and blogger. He regularly contributes to the CreditCardAssist Blog, which discusses consumer credit card topics.

Case in point, some people may be well advised to explore credit counseling solutions while other people would find it a much better plan to look towards debt settlement. There are huge differences between the two. You do not want to enter into credit counseling if no counseling in the world could possibly guide you out of the situation you are in. Similarly, you do not want to venture into something as complicated as debt settlement if credit counseling could provide a simple solution.

Either way, if you are in a tough situation where your credit card debt has reached critical levels or your interest rates are very high, you need to find an effective solution to your problem. Really, you are not alone in this situation. Many people will point out that they must contend with serious debt issues that derive from two scenarios:

The desire of people to engage in reckless credit card credit card borrowing well past a sensible point of responsibility was one factor. The growing unemployment crisis combined with the collapse of the housing market would be another. Regardless of the reason that you ended up in such a situation, you need to find a way out of it. If you do not then you will suffer from the serious issue of perennial debt. No one would want to remain in a situation such as that. The problems that derive from it are just too serious.
This has opened the door for service providers able to deliver solutions to such issues.

Credit card counseling has proven to be a tremendous way in which people have been able to reduce their debt. A solid credit counselor will take a very close look at your budget and come up with a particular plan you can follow each and every month.

It may even be possible for the counselor to work with the credit card companies and seek to reduce the amount of interest rates you pay. The counselor might also have the ability to reduce the monthly minimum payment to make it more manageable.

Payments will no longer go to the credit card companies and will instead go to the credit card counseling service. This way, the service will collect its fees and issue payment on your behalf. That way, the payments always get to where they need to go on time.

Just beware of one fact: there is virtually no regulation in the credit card counseling service industry. There are quite a few solid services that come in the form of nonprofits and then there are those that are for profit. You just need to separate the legit companies from those that are scam oriented.

Before signing on with any company for credit card counseling, perform some basic research. You want to hire a company that has been well reviewed and has no serious problems reported with its service. Double check online reviews and check out Better Business Bureau rankings. This will help you avoid such problematic services immensely.

Debt settlement is a completely different venture altogether. This is a process reserved for those that might not have any other options available to them. Basically, this is a process performed so as avoid ending up in bankruptcy.

As the name implies, debt settlement refers to making a payment offer to settle the money owed. If you owe $6,000, you could make a settlement offer for $3,500. Once the settlement has been paid, the account is closed and your debt is wiped out. Payment can come in the form of a single lump sum payment or a series of payments. Often, three payments will be the maximum amount.

Some may wonder why a lender would agree to a settlement. The answer is to get more than they would get if the client were to enter into bankruptcy. If the borrower files for bankruptcy, the ability to pay back debts could be reduced by the courts. The lenders certainly would want to avoid a scenario such as this.

For the borrower, this is not a perfect solution either. Debt settlements will certainly wreck havoc on a credit rating. However, it will do less damage than bankruptcy and does not entail all manner of legal wrangling. It will require negotiations which some may find to be more than a little difficult to take part in.

That is why they may turn to a debt settlement negotiation service. This would be a far better plan than trying to muddle your way through negotiations on your own. Hire qualified professionals as they can deliver much better results. Keep in mind, the lender really has to be convinced you have no other option or a debt settlement approval will not be likely.

Both credit card counseling and debt settlement have their benefits. The key is picking the right option for your situation since you want the best possible outcome. You do not want to muddle through options that are less than effective. Regardless of the method you pick, they could both be better options than remaining stuck in debt.

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Mirsad Hasic enjoys writing about credit card consolidation and how to stay out of debt.

There are a couple of different variations of debt, and they affect people in different ways. Having no debt can be just as bad as having too much. When people never create any debt in their lives, they may have a hard time getting approved for any loans. Banks do not like to loan out money when they can not see how well that person pays back their debt. When someone wants to borrow money from the bank and does not have any credit, they will most likely need a cosigner. If the person getting the loan can not pay off the loan, then the cosigner must take over the payments.

There is also good debt. When someone borrows money that they are able to pay back within a reasonable amount of time, this reflects very well on their credit score. Banks and creditors will see that they have a good history of repaying their debt and will be much more likely to give them a loan. It will be easier for them to buy a house, cars, and many other things that they want in their lives.

The most commonly thought of debt is bad debt. This occurs when a person borrows money that they can not, or do not, pay back. While many people may struggle trying to repay what they owe, sometimes it proves too much for the income they have. When this occurs, they may have no choice but to file for bankruptcy. This will erase their debt, but the bankruptcy will stay on their credit report for up to ten years. Many might also get help through credit counseling agencies, but even though this will help reduce the amount of debt they pay each month, using credit counseling will reflect negatively on your credit report.

Debt is a big part of the lives of many people. It affects a person in a lot ways and often determines how they will be able to live their lives. Too little or too much debt can make it hard to get by. The best thing for anyone to do is always borrow money they are sure they can repay.

How can I get rid of debt without professional help?

You can become debt free all by yourself with the help of the following guidelines:

Negotiate with your creditors: You must inform your creditors about the financial crisis you are facing and start negotiating with them to reduce your outstanding debt balance.

Prepare a budget for yourself: If your creditors agree for settlement, you have to pay a lump sum towards your bills. So, you must save sufficient money to pay off debt. You can do this by setting a saving and spending budget for yourself. The money you save by cutting costs will help you settle your bills faster.

Increase your income: You must also search for ways to increase your income. You can either take up a part time job or rent a portion of your house. The extra income will help you accumulate the lump sum required for settling your bills.

When you are unable to pay the bills, creditors normally anticipate that you may declare bankruptcy to become debt free without paying them. So, they are generally ready to go for settlement. But in case you are not able to negotiate properly with the creditor, you may opt for a settlement program offered by debt relief companies to pay off debt.

What is a settlement program?

The relief company negotiates with your creditors to reduce your outstanding bill amount by 40-60%. Instead of paying your creditors, you start saving money in a trust account monitored by the relief company. When you have saved sufficient money in the account, you can finally pay off debt.

Settling your bills will affect your credit score. But it does not lower your credit score as much as bankruptcy does. So, when you have fallen behind on your bills and cannot find ways to make them current, you can opt for settlement to pay off debt.

There are several instances when creditors filed lawsuit against debtors despite the fact that they had enrolled in a online debt settlement program. This is because it was found later that the debt settlement company had pocketed most of the cash and not made regular payments to the creditors. So, it is important that you keep track of your payments and find out how the cash that you pay for debt settlement services every month is being utilized.

There are reliable and authentic debt settlement companies too. You can find out these companies by going through the Reliability report of the BBB or Better Business Bureau. Remember, a firm offering authentic online debt settlement services will not send individual mails or fill your mailbox with spams. You are more likely to find these companies either through referrals or by checking its past records. They do promote debt settlement services but on a large scale that reaches the consumers as a whole.

This guest post was contributed by Diana Perkins who is a member of the biggest debt community and writes on topics like debt help, online debt settlement, debt relief etc.

Fortunately, getting out of debt does not have to be that complicated. Not that it’s easy to pay off bills that have grown and grown – especially those that have been building for years! But there are a few simple steps that you can do all by yourself. Without having to respond to any ads. And they work for most kinds of financial problems. Not all. But most.

So, if you’re sitting back and waiting because you’re not sure what to do, here are 5 simple do-it-yourself debt reduction strategies to start with:

1) Set a goal & put it in writing!
Without a doubt, this is THE most important step for getting out of debt. If you’ve not committed to doing it, you’ll fail, plain and simple. Doesn’t matter which company you work with, or which option you choose. YOU must know exactly what you want to achieve in order for it to happen.

2) Pick one credit card and only use it for emergencies.
And get rid of all your other cards. Put them in a drawer. Or a shoe box. Or a safe deposit box. Or a sealed envelope. You can even cut them up and throw them away. If you let yourself keep using credit cards instead of cash, then you’ll keep buying things you can’t afford. And you debt will keep growing!

3) Call all your creditors and ask them to lower your interest rates.
Sometimes this works. Sometimes it doesn’t. If not, wait a month and call again. As you pay down your debt, and make payments on time, you’ll get better rates. So keep trying. Every percentage point you get reduced means more money goes to the balance.

4) Pay an extra $10 or $20 or $50 a month above the minimum payment.
Start with the card that has the lowest balance (so you’ll pay off one card quicker). Or can pick the card with the highest interest rate. Your choice. Just make sure to pick one card, pay as much extra each month that you can afford. And you’ll start paying down your debts faster and faster!

5) Reward yourself once in a while.
If you’ve got a lot of debt, it will take a while to pay it all off. Having the discipline to stick with it month after month is great, and will pay off in the end. But in the meantime, don’t forget to enjoy your life! Give yourself a reward every month, or every other week. It doesn’t have to be a cruise to tropical island (although we’d all like that type of reward). Maybe a night at the movies, or a restaurant, or a weekend away with a loved one. Don’t ruin all your progress with one big expense. But do something fun for yourself – and do it with no worries!

Dealing with debt stinks! That’s the truth, and there’s no way around it. But if you make a goal, work hard, and have some fun along the way, you’ll be making changes that will improve your life for years to come!

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Need help getting out of debt? The author of this article, Kris Bickell, created www.debt-tips.com to help you learn how to find the right debt reduction program for your situation. If you’re considering bankruptcy, then learn the truth about debt settlement programs and find out if it is the right solution for your financial problems.