Don't panic in the face of debt: debt managed is debt under control

By Kirk Bangstad
Learning & Life Columnist

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Are you swimming in debt? Are you working day and night just to make your monthly credit card payments? Have you just realized that you can't afford to pay your taxes? Although this probably won't make you feel much better, you are not alone.

According to Cardweb.com, a website dedicated to tracking the payment card industry, American households with one credit card average over $9,000 of credit card debt, typically paying interest rates in the mid- to high-teens.* Although you live in a nation that likes to spend more than it earns, you don't have to contribute to this disheartening statistic. It is possible to get this debt monkey off of your back and start experiencing the joys of a debt-free life.

There are plenty of sources for free advice on how to manage your debt - and no, free advice doesn't have to include an I-told-you-so phone call from your parents. Check out the Internet and your local bookstore for guides and debt management tips. A little research, planning, and budgetary restraint are all many of you will need get back on track.

Debt Settlement Agencies Come to the Rescue

If your debt has snowballed, and you don't think you can get your head above water with your current income, there are places to turn where you can get professional help. Places like the Debt Relief Network are sanctuaries for those with debt problems.

The Debt Relief Network is a debt settlement agency whose mission is to get you back on your feet in a matter of months. For a small service fee, places like the Debt Relief Network will take over your debt payments and try to negotiate a lower interest rate on your behalf. Because they can act on the behalf of so many people like you, their size gives them the negotiating clout necessary to make large credit card companies listen.

After settling your debt with your creditors, a debt settlement agency will help you set up a monthly payment plan with them. Of course they don't do this entirely out of love for their fellow man. They make their money by charging you service fees, but these fees are often a fraction of the savings you receive through reduced interest payments.

Working with a debt settlement agency has its pros and cons. One of the biggest pros is the ability for you to stop stressing about your debt. You won't get anymore harassing phone calls from collection agencies, and you will sleep more easily knowing that you have a plan to become debt free. One of the cons to settling your debt with an agency is that while they're helping you pay off your debt, they close your credit accounts and don't let you open any new accounts. This reduction in your credit limit might temporarily hurt your credit rating. Of course, once you've paid off your debt entirely with the help of an agency, your credit rating should be better than ever.

Tax Debt Relief

Unfortunately, if you're in debt up to your ears, you may also have a tough time paying your taxes. If you don't think you can pay your taxes, and can't find a way to borrow the money you need at a low interest rate for a short term, you will probably have to deal with the IRS.

Avoid joining the ranks of those who simply try to forget about their tax burdens and hope the IRS doesn't find them. By burying your head in the sand, you are taking a risk that could cost you much, much more than what you currently owe. For example, the IRS can assess high late-payment fees and penalties, put a lien on your assets, or even garnish your wages to collect tax debt.

Instead of avoiding your problems, your best bet is to contact a company like the Tax Relief Network. The Tax Relief Network is an agency whose professionals are experts at dealing with the IRS. At the very least, they can work on your behalf to negotiate a payment plan for you with the IRS that allows you to make affordable monthly payments. Tax relief agencies can also help reduce your tax payments, and help you avoid the IRS's more drastic methods of tax collection.

Debt and Tax Relief: Settle your debt before collectors invade your home

Being saddled with debt or facing the IRS can often be too much to handle. It is OK to ask for help in these trying times. If you don't know where to turn with your financial troubles, go visit companies like the Debt Relief Network or Tax Relief Network. See what they can do for you. There is a good chance that they can help shoulder some of your burden, and give you advice that will get you back on your feet again.

Source:

http://money.cnn.com/pf/101/lessons/9/

About the Author
Kirk Bangstad is an artist manager and singer working in Chicago, IL. His previous experience includes consulting for technology companies in the Silicon Valley and serving as a field director and publicist for a statewide political campaign. Kirk holds a B.A. in government from Harvard University.

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