The Bankruptcy Lawyers Blog

SILVER SPRING, Md. Dec. 28 /U.S. Newswire/ -- The
Christmas tree is rapidly losing its needles and the kids have already
broken some of their new toys. These are the sure signs that the holiday
season is coming to a close. Just about the only thing that is new is the
stack of bills that arrive in the mail everyday. You spent too much money
during the holidays and now you're in some financial hot water.
It does not have to be this way as there are a number of steps that consumers
can take to repay their holiday debts and restore their financial health:

-- Make a New Year's resolution to: balance your checkbook each
time you receive a paycheck to ensure that you are not spending more than
the amount you make.

-- Keep track of your bills. Designate a filing cabinet or secured box for
bills and financial statements. Make separate files for bank statements, tax
documents, credit card bills, medical receipts, mortgage statements and
other records. Keep up with the due dates for bill payments.

-- Create a monthly budget. Your budget is your spending plan. To create a
budget plan, determine your monthly income and recurring expenses like rent
or mortgage payments, utility bills, food, transportation costs, tuition,
savings, entertainment and personal grooming. Then identify other recurring
and periodic expenses like clothing, household appliances and maintenance,
gifts, credit card purchases and vacations.

-- Prioritize your expenses and spending. After writing down your expenses,
prioritize each expense based on your needs versus your wants. Set spending
limits and determine estimated costs for each expense. If additional funds
are left over after all monthly expenses are paid, split the rest of your
income between debt reduction and savings. Pay down high interest credit
card bills and loans, which will save you money over time. Use extra funds
to also increase your savings --its good insurance for unplanned emergency
expenses. Look for ways to reduce daily spending: take lunch to work more
often and look for movies during early matinees instead of evening showings.

-- Develop a diversified savings plan. Savings should not be limited to
Retirement planning. It's important to save for a down payment to purchase a
home or vehicle and other items like uncovered medical expenses. Make
regular deposits in an interest-bearing savings or money market account to
cover these costs. And be sure to take advantage of employer sponsored
benefit savings, such as retirement accounts and flexible spending accounts
which help cover uninsured medical costs and lower the taxes you'll pay on payroll income.

-- Recognize the early warning signs of debt trouble. You're behind on the
basics, like January's mortgage or rent and utilities. You're using credit
to buy items you should be able to buy with cash, like groceries. You're
skipping some debt payments to make others. You're receiving overdue notices
or telephone calls from bill collectors. More than 25 percent of your
take-home pay is being used to pay back credit card debt.

-- Don't suffer in silence, take action and get help. Call your creditors or
seek helpful credit counseling. Don't be afraid to call your creditors. As
soon as you know you're going to have problems contact your creditors and
explain your situation and what you're doing to meet your debt obligations.
Depending on the creditors' policies and your situation, credit and payment
history, you may be able to negotiate your next payment or a lower interest
rate. Remember, your creditors would rather keep you as a customer than lose
you to bankruptcy or foreclosure.