Getting Out From Under Debt

troubled manThis article was recently published by the MSCPA.

Are you facing problems managing a heavy debt load? If so, you’re not alone. The Massachusetts Society of CPAs offers some tips to help you emerge from indebtedness and do a reality check on your spending.

Make A Call
There are a number of steps you should take if you are unable to keep up with your payments. First, contact your creditors, whether the mortgage lender, utility company or credit card issuer, and explain your situation to them. These businesses would prefer to keep you as a paying customer, so they are often willing to work out alternative plans. These might include debt moratoriums, in which you defer paying your bills for a certain period until you’re back on your feet, or payment plans, in which you lower your monthly bill by stretching out your payments. Also be sure to ask your credit card company about lowering your interest rate, a step that could also reduce your monthly outlays. No matter what kind of help you are seeking, don’t be afraid to have an honest conversation with your creditor, because they may be willing to help. This simple step will also likely end calls from creditors asking about payments, which should reduce stress and make it possible for you to concentrate on getting back on your feet.

Get Help
A reputable credit counselor can assist you in negotiating with your creditors or putting together a realistic budget that can bring you through your current crisis and get you on sound footing for the future. The National Foundation for Credit Counseling can help you find a reputable counselor in your community who will offer free or low-cost advice. Contact them at 800.388.2227 or learn more at Be aware that there are many scam credit counseling operations that make unrealistic promises about lowering your interest rate or getting your debt reduced or forgiven altogether. Be very cautious if a company’s offers sound too good to be true or if a hefty upfront payment is required.

Get A Fresh Start
Whether you are in debt because of poor spending habits or an unexpected financial crisis, this is a good time to prepare a budget that reflects your current situation. In the next month, keep a list of everything you spend each day. You may be amazed at the number of unnecessary expenses that have crept into your budget. At the end of that month, review the list and decide how you can change your habits so that you will cut back on the things you don’t really need.

Your CPA Can Help                                                                                                                Whether you are trying to get a handle on debt or address another important financial concern, we can help. Call us at 508-830-0007.


About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
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