For a relatively small debt, living on a budget will be enough for you to cut down your debts and still keep your assets. Otherwise if you owe a lot, living on a budget is merely the first step in the get-out-of-debt process. You will also need to do some or all of the following actions:

• Negotiate with your creditors.

Make a list of all your debts and the relevant information pertaining to each one. You should also analyze your budget to figure out how much you can afford to pay on your debts every month, starting with the ones that are the most important.

Ask your creditors to help you keep up with your debts by lowering your monthly payments on a temporary or permanent basis, reducing the interest rate on your debts, or letting you make interest-only payments for a limited period of time.

Never allow a creditor to pressure you into agreeing to pay more than you can afford. Whenever you talk with a creditor, explain clearly why you’re calling and exactly what you’re asking for. If the first person rejects your request, politely end the conversation and ask to speak with a manager or supervisor.

• Consolidate Your Debt

Consolidating debt is a process when you get new debt to pay off existing debt. We know that going into debt to get out of debt may not sound reasonable, but if you did it right, it can be a smart debt-management strategy. To do it right, make sure that these following condition must be met when you consolidate:

• The interest rate on the new debt is lower than the rates on the debts you pay off.

• The monthly payment on the new debt is lower than the combined monthly total for all the debts you consolidate. The new debt you choose must be has a fixed interest rate.

• You commit to not using credit again until the new debt is paid off.

• Consult to credit counseling agency.

The advice and assistance of a credit counseling agency can be a great solution when you have a lot of debt and try to take control over it.

Credit counseling agency can especially help when you are still figuring what to do or not too confidence that you are able to improve your finances on your own. A credit counseling agency can

• Help you to set a household budget.

• Evaluate a budget you have already created previously, and suggesting changes that will help you get out of debt faster and avoid loss of assets.

• Negotiate lower payments with your creditors and set up a debt-management plan for you

• Develop your money-management skills.

Not all credit counseling agencies are reliable, so take time to choose a reputable one. First and foremost, that means working with a nonprofit, tax-exempt agency that charges you little or nothing for its services.