If You're Already Drowning

Most of what you've read so far is directed at anyone who's concerned about debt. But if your concern has already escalated to fear or outright panic—if you no longer can pay the minimums on your debt, or collection agencies are already calling—you need to take some extra action right now.

The following game plan is adapted from my previous book, Your Credit Score, in the chapter on dealing with a financial crisis. It consists of three basic steps:

Figure out how to free up some cash.
Evaluate your options.
Choose a path and take action.

Step 1: Find the Cash

You have two choices—cut expenses or increase income. You may need to do both.

You also may need to go beyond the easy cuts—fewer dinners out, dropping ...

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