The 3 Step Debt Management Plan

Are you feeling overwhelmed by debt? Follow these steps using our free resources to finally become free:

Step 1. Evaluate Your Debt Situation

The first step in eliminating debt is figuring out exactly how much debt you have, what your interest rates are, and calculating your total monthly debt payment.

To help you do this, we’ve created a set of spreadsheets that are designed to organized your debts. Simply plug your personal debt information into the spreadsheets and they will calculate your total debt automatically. To download the free debt evaluation spreadsheets and learn how to use them, visit the Debt Evaluation page.

Step 2. Calculate Your Monthly Living Costs and Income

After you know exactly how much debt you have, the next step is calculating your monthly living costs and income. The amount of money you make and spend each month is a major factor in deciding the best strategy to reduce your debt.

We’ve also created spreadsheets you can use to calculate income and monthly living costs. Download them and read the instructions on our Debt Evaluation page.

Step 3. Examine Your Options and Make a Plan

Now that you know how much you owe each month on your debts and the amount of money you have left over after your monthly expenses are paid, you can determine if paying off your debts as they stand is a viable option.

Option 1. Make Your Payments as Agreed Upon

If you can afford to make your debt payments, we strongly suggest that you do so. Not only is it morally right to honor your obligations, but failing to pay will seriously damage your credit score and could possibly lead to legal judgements against you and liens on your wages and personal property. If you want to borrow money in the future for a large purchase such as a house or a car, you will have to pay a significantly higher interest rate, if you can get credit at all.

Other Alternatives

If you can’t afford to make your monthly debt payments, then you should consider alternative debt relief strategies. Although there are tradeoffs with every option, debt relief can help you reduce the amount you owe, negotiate lower interest rates, and get debt collectors off your back.

The biggest downside to debt relief is that it will have a negative impact on your credit score. This is because when you negotiate a lower interest rate or principal amount, you are breaking the agreement you made with your creditors. On the other hand, if you can’t afford to make your debt payments, you will almost certainly be making late payments or failing to pay entirely, so your credit score will be damaged either way.

Another potential downside of debt relief services is that they sometimes come at a high price. The debt relief industry is known to have bad actors who charge their clients high upfront fees and provide little value in return. When considering a debt relief company, it’s extremely important to do your research and make sure you are working with a reputable organization. Perhaps the best option of all is foregoing a debt relief company and negotiating with creditors yourself.

Debt Relief Options

There are 3 primary debt relief options:

  1. Debt Management – Debt management focuses on creating a plan to pay and negotiating lower interest rates from your creditors. Learn all about debt management from our library of debt management articles.
  2. Debt Consolidation – With debt consolidation, the debtor takes a debt consolidation loan which is used to pay off all their other debts at once. This allows them to eliminate high interest debts and consolidate all they owe into one payment at a lower interest rate. Learn all about debt consolidation from our library of debt consolidation articles.
  3. Debt Settlement – Debt settlement involves negotiating with your creditors to accept a lower amount of principal and/or lower interest rate. This can dramatically reduce your debt and get your creditors to end their collection attempts. Learn all about debt settlement in our library of debt settlement articles.

What Else Should You Know?

In order to make the best the decision with your debt, it’s important that you understand how debt and credit work. This will give you a broad understanding of how the system works, what your creditors’ motivations are, and how you can arrive at the best result.

Important topics include:

  • Credit Scores and Credit Repair – Learn how lenders evaluate potential borrowers, how you can damage your credit, and how to improve your credit if it has been damaged.
  • Debt Collection – Learn about how debt collectors think, what they want, and what they can and cannot do when attempting to collect a debt.
  • Bankruptcy – Bankruptcy is the option of last resort, but if your debt is so staggering that you believe you have no other alternative, it’s important to understand how bankruptcy works and the different options available to you.

If you have specific questions, we encourage you to search our website, which contains nearly 300 articles on debt and credit topics. If you can’t find what you’re looking for, then contact us and we’ll see if we can help.

Looking for more information? Browse our library of debt and credit articles to find the answers you need.

Debt Management Articles

Debt Consolidation Articles

Credit Scores and Credit Reporting

Credit Card Debt Articles

Debt Collection

Debt Negotiation

Debt Relief

Credit Repair


Debt Settlement

Debt Reduction

Debt Elimination

Debt Advice

Student Debt

Christian Debt Services