ou have coming in, how much is going out, how much of your spending is necessary and how much isn't. Deciding how much money you have coming in is easy, just look at your pay stubs - printed or otherwise.

Deciding how much you have going out is not always that easy and it's important to be honest and calculate everything. First, you need to gather your bills and your receipts for all expenses, necessary and unnecessary. Add everything up to get an idea about how much your spending. Second, list your expenses by necessary and unnecessary; and, no, that $9 movie is not necessary. I was even told by a credit counselor that spending $50 a week on food was too much and that only $20 was necessary. Of course, I was thinking, 'what world are you living in?'. While difficult to do sometimes, you will need to make a decision a

So either you're considering paying a visit to a certified credit counselor or you've already been to see one. Either way, the fact is you're deep in debt and don't know how you're going to pay them off. In general, you need help. Either you've been overwhelmed by unexpected but necessary bills, you've lost your job but need to pay rent somehow, or you've simply lost control of your budget. Whatever the reason, you need help and a Debt Management Plan might possibly help. Whether one can or not will depend on your personal situation.

In a Debt Management Plan essentially your credit counseling organization takes over the managing of most of your unsecured debts. They directly interact with your creditors in order to negotiate lower interest rates, eliminate fees, prioritize debt payments and arrange what you will pay. The credit counseling agency may be able to help manage most unsecured debts.

Before your sign up for a Debt Management Plan

Before signing up for any Debt Management Plan, you want to take some steps to do research and prepare yourself. The more prepared and informed you are, the better you will understand the process and options that are available to you even before discussing the situation with your credit counselor.

1 - Talk to your creditors yourself

The fact is, many negotiations between a creditor and a credit counselor can be done by you. Before I went to see a credit counselor, I negotiated lower interest rates on all my credit cards, so low, in fact, that even the credit counselor couldn't do better. You also want to have a long chat with your creditors about what other concessions they might be willing to make for you and for the credit-counseling agency you're considering. Creditors want their money and it may be the case that you can negotiate a better arrangement because you know your situation best. As my own situation got worse for numerous reasons, I negotiated with my creditors a second time and was quite surprised that they were willing to eliminate the late fees and arrange a workable payment plan with me.

The benefit of a Debt Management Plan is that all the negotiations are done for you; you simply make one monthly payment to the credit-counseling agency after you sign-up and they pay your creditors; and they may be able to provide a timeline for getting out of debt, which is really what the goal is. In going this route, you may have to agree not to use or apply for credit while participating in the Debt Management Plan.

2 - Find a reputable credit-counseling agency

Finding a reputable credit-counseling agency means research. Many of us have had trouble with debt at one point in our lives, so ask around and see if anyone has had success with a particular agency. Also, if you think you have found one, check with the Better Business Bureau, check online to see if this agency is reputable. Another option would be to, again, talk with your creditors and see if they work with that company. For me it turned out that the agency I chose didn't work with two of the creditors that I owed the most to.

3 - Work out a budget

Before making any financial decision, one of the first and most necessary steps is to figure out just how much money you have coming in, how much is going out, how much of your spending is necessary and how much isn't. Deciding how much money you have coming in is easy, just look at your pay stubs - printed or otherwise.

Deciding how much you have going out is not always that easy and it's important to be honest and calculate everything. First, you need to gather your bills and your receipts for all expenses, necessary and unnecessary. Add everything up to get an idea about how much your spending. Second, list your expenses by necessary and unnecessary; and, no, that $9 movie is not necessary. I was even told by a credit counselor that spending $50 a week on food was too much and that only $20 was necessary. Of course, I was thinking, 'what world are you living in?'. While difficult to do sometimes, you will need to make a decision ab

. The credit counseling agency may be able to help manage most unsecured debts.

Before your sign up for a Debt Management Plan

Before signing up for any Debt Management Plan, you want to take some steps to do research and prepare yourself. The more prepared and informed you are, the better you will understand the process and options that are available to you even before discussing the situation with your credit counselor.

1 - Talk to your creditors yourself

The fact is, many negotiations between a creditor and a credit counselor can be done by you. Before I went to see a credit counselor, I negotiated lower interest rates on all my credit cards, so low, in fact, that even the credit counselor couldn't do better. You also want to have a long chat with your creditors about what other concessions they might be willing to make for you and for the credit-counseling agency you're considering. Creditors want their money and it may be the case that you can negotiate a better arrangement because you know your situation best. As my own situation got worse for numerous reasons, I negotiated with my creditors a second time and was quite surprised that they were willing to eliminate the late fees and arrange a workable payment plan with me.

The benefit of a Debt Management Plan is that all the negotiations are done for you; you simply make one monthly payment to the credit-counseling agency after you sign-up and they pay your creditors; and they may be able to provide a timeline for getting out of debt, which is really what the goal is. In going this route, you may have to agree not to use or apply for credit while participating in the Debt Management Plan.

2 - Find a reputable credit-counseling agency

Finding a reputable credit-counseling agency means research. Many of us have had trouble with debt at one point in our lives, so ask around and see if anyone has had success with a particular agency. Also, if you think you have found one, check with the Better Business Bureau, check online to see if this agency is reputable. Another option would be to, again, talk with your creditors and see if they work with that company. For me it turned out that the agency I chose didn't work with two of the creditors that I owed the most to.

3 - Work out a budget

Before making any financial decision, one of the first and most necessary steps is to figure out just how much money you have coming in, how much is going out, how much of your spending is necessary and how much isn't. Deciding how much money you have coming in is easy, just look at your pay stubs - printed or otherwise.

Deciding how much you have going out is not always that easy and it's important to be honest and calculate everything. First, you need to gather your bills and your receipts for all expenses, necessary and unnecessary. Add everything up to get an idea about how much your spending. Second, list your expenses by necessary and unnecessary; and, no, that $9 movie is not necessary. I was even told by a credit counselor that spending $50 a week on food was too much and that only $20 was necessary. Of course, I was thinking, 'what world are you living in?'. While difficult to do sometimes, you will need to make a decision a

t other concessions they might be willing to make for you and for the credit-counseling agency you're considering. Creditors want their money and it may be the case that you can negotiate a better arrangement because you know your situation best. As my own situation got worse for numerous reasons, I negotiated with my creditors a second time and was quite surprised that they were willing to eliminate the late fees and arrange a workable payment plan with me.

The benefit of a Debt Management Plan is that all the negotiations are done for you; you simply make one monthly payment to the credit-counseling agency after you sign-up and they pay your creditors; and they may be able to provide a timeline for getting out of debt, which is really what the goal is. In going this route, you may have to agree not to use or apply for credit while participating in the Debt Management Plan.

2 - Find a reputable credit-counseling agency

Finding a reputable credit-counseling agency means research. Many of us have had trouble with debt at one point in our lives, so ask around and see if anyone has had success with a particular agency. Also, if you think you have found one, check with the Better Business Bureau, check online to see if this agency is reputable. Another option would be to, again, talk with your creditors and see if they work with that company. For me it turned out that the agency I chose didn't work with two of the creditors that I owed the most to.

3 - Work out a budget

Before making any financial decision, one of the first and most necessary steps is to figure out just how much money you have coming in, how much is going out, how much of your spending is necessary and how much isn't. Deciding how much money you have coming in is easy, just look at your pay stubs - printed or otherwise.

Deciding how much you have going out is not always that easy and it's important to be honest and calculate everything. First, you need to gather your bills and your receipts for all expenses, necessary and unnecessary. Add everything up to get an idea about how much your spending. Second, list your expenses by necessary and unnecessary; and, no, that $9 movie is not necessary. I was even told by a credit counselor that spending $50 a week on food was too much and that only $20 was necessary. Of course, I was thinking, 'what world are you living in?'. While difficult to do sometimes, you will need to make a decision a

for credit while participating in the Debt Management Plan.

2 - Find a reputable credit-counseling agency

Finding a reputable credit-counseling agency means research. Many of us have had trouble with debt at one point in our lives, so ask around and see if anyone has had success with a particular agency. Also, if you think you have found one, check with the Better Business Bureau, check online to see if this agency is reputable. Another option would be to, again, talk with your creditors and see if they work with that company. For me it turned out that the agency I chose didn't work with two of the creditors that I owed the most to.

3 - Work out a budget

Before making any financial decision, one of the first and most necessary steps is to figure out just how much money you have coming in, how much is going out, how much of your spending is necessary and how much isn't. Deciding how much money you have coming in is easy, just look at your pay stubs - printed or otherwise.

Deciding how much you have going out is not always that easy and it's important to be honest and calculate everything. First, you need to gather your bills and your receipts for all expenses, necessary and unnecessary. Add everything up to get an idea about how much your spending. Second, list your expenses by necessary and unnecessary; and, no, that $9 movie is not necessary. I was even told by a credit counselor that spending $50 a week on food was too much and that only $20 was necessary. Of course, I was thinking, 'what world are you living in?'. While difficult to do sometimes, you will need to make a decision a

ou have coming in, how much is going out, how much of your spending is necessary and how much isn't. Deciding how much money you have coming in is easy, just look at your pay stubs - printed or otherwise.

Deciding how much you have going out is not always that easy and it's important to be honest and calculate everything. First, you need to gather your bills and your receipts for all expenses, necessary and unnecessary. Add everything up to get an idea about how much your spending. Second, list your expenses by necessary and unnecessary; and, no, that $9 movie is not necessary. I was even told by a credit counselor that spending $50 a week on food was too much and that only $20 was necessary. Of course, I was thinking, 'what world are you living in?'. While difficult to do sometimes, you will need to make a decision about what expenses you can eliminate. When you have made these decisions, you will then be able to see your financial situation for the future a little better and be better able to discuss your options with your credit counselor.

Is a Debt Management Plan Right For You?

One thing to remember is that not everyone is eligible for a Debt Management Plan. My own negotiations were so good that the credit-counseling agency could do no better, and in fact the interest rates I was paying were half what the credit-counseling agency could get. You also might be so far in debt and simply not making enough money to afford any but the most essential living expenses and have nothing left over to pay creditors. There are other decisions to be made, though, before deciding to participate in a Debt Management Plan.

Here's what you should cover with your credit counselor beforehand:

1 - Options besides a Debt Management Plan

Everyone needs options and it's always good to have a few. Before you sign-up for a Debt Management Plan, you should know what they are.

2 - Other Credit-Counseling services

Check to see if the credit-counseling agency also provides other money management services, such as help with budgeting. Sometimes our debt is simply due to the inability to budget and manage money well. Education on money management issues can go a long way in preventing further problems with debt.

3 - Impact on your Credit Score

There are some conflicting stories about what happens to your credit score when you sign-up for a Debt Management Plan. When I talked with a credit-counselor, I was told it would not impact my credit score. However, after talking with my creditors, I was told that it would reflect negatively on my report. I was more inclined to believe the creditors because they are, in fact, the ones who report on my payment history, length of history, etc. You don't want anything negative on your report, so find out from both your creditors and your credit-counselor how it might affect it. While you may not be able to avoid having negative entries on your credit report, you should try to minimize the damage as much as possible.

4 - How much will your monthly payment be?

This is an important fact to know because it will affect your budget and you need to know if you will be able to manage the payment with all of your other necessary expenses. As with any expense, if you can't afford it, then you don't want to commit to it.

Can the Credit-Counseling Agency do what it says?

Like any major financial decision, you want to take some time to do research and think about it. Don't simply sign-up at the first meeting with a credit counselor; you may be in for a big surprise.

Here are some further issues you should research:

1 - Confirm concessions

Your Credit counseling agency should provide with a list of what they can do for you by creditor, such as interest rates, elimination of fees, etc. Check with your creditors to confirm that the credit-counseling agency can provide these concessions and whether there is a waiting period for them.

2 - Will your creditors be paid on time?

An important fact to