The majority of the population is in debt because marketing has convinced average people they need the best car, biggest house, largest television set, and most credit cards. Paying for those items while living paycheck to paycheck is never mentioned. Most people do not have proper money management skills because loans and credit cards allow everyone to get an item now and pay for it later. No one stops to think about the consequences of living above their means until they are in significant debt. At that point, late fees mount up, interest rates on those credit cards go up, and expenses are much more than the monthly income. That becomes a problem that can lead to losing a car or house, having to file bankruptcy, or getting utilities disconnected.

The ways to get out of debt include working with a debt consolidation company or taking out a home equity or consolidation loan. If credit issues are a recurring challenge, a loan may not be approved, even from a private lender. The consolidation company works with creditors to have late payments removed from the account, lower payments, or have balances reduced. The individual makes one payment to the debt consolidation company. The company takes on the responsibility of dispersing that payment among the creditors. Fees are charged by the company, but they are typically low and rolled into that one monthly payment. People can see more about debt consolidation companies online. As long as the payments are made in full and on time, creditors will stop calling and sending out threatening letters.

Getting out of debt is only the beginning. Staying out of debt will take discipline, commitment, and help. Consumer credit counseling services are available to complete a financial assessment, provide recommendations for curtailing spending, and suggest opening a savings account. Tips on how to distinguish between a need and a want can help individuals prioritize spending. Cutting up all those credit cards is essential to avoid getting right back into debt. One credit card used for emergencies is fine, but carrying several is too tempting for most people. The entire process will not be easy, but the stress and burden of debt are much harder than learning money management skills.

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