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Ask the Experts

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Q:
I made a BIG mistake by getting too many credit cards. What do you recommend?

I am in over my head. I made a BIG mistake by getting too many credit cards. Now I can’t get out from under. What do you recommend? -Julie

Julie,

Fortunately, there are many options to repay unmanageable debt. The first is to take a look at your income and expenses and make changes that would allow you to pay off this debt. By identifying where your money is actually going you may be able to identify areas that you can trim. Non-essential items such as, cable, extended cell phone features, meals out and entertainment can really add up. By simply reviewing your situation, you may be able to tackle this on your own. If you feel overwhelmed, a credit counselor can help you complete an assessment and establish a livable spending plan.

A second option is to establish a Debt Management Plan (DMP) with Money Management International (MMI). Through the DMP, your counselor should be able to negotiate a repayment plan with your creditors.

Another option is to try and "settle" this debt for less than the full balance. But you must be aware, if they accept your settlement offer, you must send in the settlement balance immediately. You also must consider that there may be an impact on your ability to get credit in the future.

A fourth option is to seek a consolidation loan. In this scenario, the first hurdle will be to qualify for the loan.

Finally, you may also consider bankruptcy as an option.

Best of luck,

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