Debt Management How to Manage a Debt Reduction Plan

By: Joshua Penman

The first part of the process of debt management is most definitely lining up your bills versus your income. However, in this article I want to cover an approach that comes straight from the credit report.
We obviously don't want to ignore the debts not on your credit report, regardless of how small or what they are.
Lets start by getting your credit report from the three agencies: Equifax, Experian and TransUnion.
You may receive a free copy of your credit report through many different means. The site: www.DebtFreedomSolution.com is one source for service providers that can get your report for you.
Some rules apply that allow you a free copy of your credit report as follows:
1) If you applied for a loan and were turned down, you can request a copy by writing the correct credit bureau within 30 days of the rejection. With your request, you should include a copy of the declined loan application.
2) You can also get a free report if you are unemployed, planning to apply for jobs in the next 60 days, receiving public welfare assistance or believe the credit file contains mistakes resulting from fraud.
3) Some states already offer a free annual credit report from each of the three agencies. Residents of
Colorado, Maine, Massachusetts, Maryland, New Jersey and Vermont are entitled to one free series annually. Georgia residents are entitled to two free annual credit reports from each credit-reporting agency.
After obtaining the credit report, you'll need to go through it carefully.
We want to look at a number of items and groups as follows.
1) Debts on the account by Amount. Smallest to Largest.
2) Items that you really feel are not yours or have no record of.
3) Age of items. Very important category here.
Right now, for the items that are questionable, I'll just say that clarification is needed so you'll have to contact the creditor and resolve these. I'll be covering this aspect in other articles and the blogs at www.DebtFreedomSolution.com as well as www.HowToCleanUpYourCredit.net will have information to assist you.
Now, you want to start working on the oldest debts. Attempt to negotiate a settlement with the creditor. Sometimes they are willing to take half of the current amount due. Do not challenge any debts you know are valid. You negotiate these debts or simply pay them.
Next step. This is where balancing the budget versus the debt load you carry is very important. You'll need to start paying down the lowest amount debts, while making minimum payments on the largest debts.
They point - If you have:
1) Less items on your credit report quickly.
2) Encouragement that you're are making some advancement
3) Demonstrate to creditors that you are working diligently on your credit.
You will be in a much better place, sooner in the area of credit and debt management as well as emotionally to. You state of mind will improve and you'll be more productive, able to pay down the rest sooner and work better with the larger creditors and perhaps negotiate a better settlement.
There are lots of Debt Settlement, Debt Counseling and Debt Consolidation companies and services out there. The above-mentioned sites have information to help you there if the need is there.
You have to be very careful about who you would choose to help you with your debt management. Please word hard to do the best you can with your debt management yourself prior to contacting any debt management or service companies.

Article Source: http://yourfinance.co.za

About The Author
Joshua Penman is a Blogger, Full time Web, SEO and IT Consultant and in the main consultant for the site: www.DebtFreedomSolution.com a source for Debt Management Services and Articles.