These are all creditors, whether it’s the bank, the electric company or the local newspaper, they all want one thing from you: money. There’s just one tiny little wrinkle: You don’t have enough to give them. With near 10% unemployment and hundreds of thousands more underemployed (i.e. working for fewer hours than they want to, or working for far less than they need in order to make an adequate living), more and more of us are falling behind on our debts. However, there is a solution to the nightmare. It’s called a debt management consultant. So what do debt management consultants do?

If you get yourself a reliable debt management consultant, they will do a variety of things to help you with your debt:

• Help you manage your money better. The first thing that a debt management consult should do for you is to help you make and stick to a realistic budget. You lost your job and you’re living on various part time wages? Yeah, it’s tough, but there are solutions to every problem. You’ll need to adjust your lifestyle, but it can be done and your debt management consultant will help you do it.

• Negotiate with your creditors. No, they will not get your debt settled for 35 cents on the dollar. And by the way, if they do tell you they can do that, run like hell – you’ve found yourself a con man. However, they can help you craft a strategy together with your creditors to lower your monthly payments, usually through lower interest rates so that you can try to catch up.

• Counsel you on managing your debt in the future. A quality debt management consultant will help you to manage your debt not only now, but in the future. They will do that by showing you when it pays to use your credit cards and when you’re better off paying cash (hint: buying your groceries on credit is a big no no. That will only sink you deeper and deeper into debt since they’re gone and consumed long before you pay for them).

Well, let’s assume you’re like the typical American and you have around 6 credit cards, each one of them closing in on the maximum. In total, you may owe around $8,000 on all of them. You likely have no savings or very little savings and just before the whole credit crisis hit, maybe you decided to refinance the house in order to put in a pool, or a new bathroom. Or maybe you had decided that the rising value of your home meant you could take finally that trip to Rome that you’d always dreamed of. Whatever the case may be, today, you’re drowning in debt and you may be unemployed or if you are employed, you may be making significantly less than you need to be earning because your company forced everyone onto a four day work week or to take a 10% pay cut. Hey, you’ve still got a job right? Well, if you’re in that situation, you may be a candidate for a debt relief clearinghouse.

What these places will do is to contact all your credit cards on your behalf and negotiate a deal for you. They may be able to get lower interest rates for you and they may even be able to get the credit card companies to settle for less than the full amount you owe. Especially in this economy, the credit card companies are eager to work with such places so that they can get something rather than seeing a debtor walk away and not pay anything. However, you need to be sure to pick a debt relief clearinghouse which will actually do the job and not just walk away with your money. Here’s a few tips on how to do that:

• Look for companies with a history. A successful company will have been in business for years and will be able to prove it.
• Check with the Better Business Bureau. If the company you want to work with has scammed others, odds are that they’ve been reported.
• Be prepared to walk away. If the company is just eager to get you to fork over your cash, then walk away. A legitimate company will take the time to tell you exactly how it works, will have literature for you to study and will not pressure you to sign right now. And on that same vein. . .
• Beware of incredible claims. If the company you’re working with is trying to claim that they can get you a deal where you’ll pay just 35 cents on the dollar, run the other way. While it’s nice to believe that such a thing could actually happen, the reality is that most credit card companies do not want to settle for so little and it’s highly unlikely that the debt relief clearinghouse can get you such a great deal.
• Keep your wits about you. If it smells fishy, just walk away. There are enough legitimate places to work with that you don’t have to work with them even if they were recommended.

If you’ve followed the news, you’re probably aware that money is tight these days. The banks don’t want to lend to anyone who has bad credit, but those are precisely the people who need to find a way to refinance their loans. There are some places that will refinance for you, but the terms are sometimes confusing and sometimes seem like they might not be a very good deal. So what should you take into account if you need to refinance with bad credit?

• Ask a lot of questions. Do not be afraid to ask questions from the loan officer you are talking to. Many of these people are fast talkers who are paid to get you to sign the papers as quickly as possible. Therefore, it is your job to hold back and not make any rash decisions. No matter how bad your situation is now, it could get even worse if you sign a bad deal.

• Take the time to think it through. It sounds tempting that you’ll reduce your monthly mortgage payments by $200. But remember that doing it will ultimately cost you thousands of dollars more since you’re creating a new loan with longer terms and paying more fees. This might be a good deal, especially if it means that you can stay in your home. However, you need to ensure that you will be able to afford that new payment and to decide if it’s worth adding thousands of dollars to your expenses.

• Talk to a lawyer. Most people want to believe they can understand the documents themselves. However, you need to speak to a lawyer who understands these things and who works for you to make sure you didn’t miss something. Even though it will add to your expenses, ultimately, you’ll be happier if you do it and your bad credit finance loan will not feel like such a burden if you understand what you’re getting into.

• Pay cash. It sounds simple and it is. The reality is that when we pay with a credit card, we don’t really feel like the money has to be paid back. At least not right away. It’s in the future some time and so the pain is a little less. But if you need to pay for things in cash, then you will instantly start thinking twice and three times about a purchase because you feel the money coming out of your pocket right then and there.

• Make a Budget for yourself. In essence, what you want to do here is to walk around with a little pocket notepad and keep track of everything that you’re spending money on. You’ll be amazed at how fast your notebook will fill up. That candy bar that you thought was no big deal or the can of soft drink that you just had to have because you were “dying” will add up quickly. Once you see how much you’re spending and you know you need to write down every single expense, you will quickly think twice before spending the money. That said. ..

• Don’t overdo it. Yes, you need to be careful about what you spend money on and that is a great debt management tip. But if you start depriving yourself of everything, you’ll end up like someone who goes on one of those liquid diets. I was on one once; by the second day, I was so miserable that in desperation, I ended up eating a candy bar at work because I needed something. Instead. .

• Ration your treats. Allow yourself something special once in a while. There’s nothing wrong with saving up to go out to the movies once in a while, but when you’re going three times a week, that’s going to add up very quickly. Consider going once a month and thinking of it as a special time instead of just an everyday activity.

• Use generics and clip coupons. No one likes the idea of having the giant bottle of generic bleach in their laundry room instead of a name brand, but the reality is, it works just the same and costs less, helping you to manage your debt problem.