Summary

Debt problems don't get better on their own. The sooner you take action, the more options you'll typically have to fix the situation:

• Make a plan. Before approaching your creditors, you need to prioritize your debts, identify your resources, and create a tentative payment plan.

• Know your options. Lenders' willingness to negotiate and their options for pursuing payment vary widely. Your ability to erase debts also depends on your financial situation and the type of debt.

• Take great care in dealing with collectors. Unfortunately, violations of the federal laws designed to protect borrowers are fairly common. You should know your rights, negotiate hard, and document every agreement in writing.