If you are one of the millions of people who have credit card debt which is getting out of hand, you do need to address it immediately. It will only get worse. Banks will bargain with you on your interest rates if you can afford to make a payment agreement and stick to it. 

For solid, inexpensive, do-it-yourself information on anything legal, see http://www.nolo.com. 

8 Warning signs of Credit Trouble

• Paying only the minimum amount due on your credit cards.
• Charging more each month than you make in payments.
• Using credit and cash advances for items that used to be purchased with cash, such as groceries, gas, and insurance.
• Having a total credit balance that rarely decreases.
• Being at or near your credit limit and applying for new cards.
• Needing a consolidation loan to pay existing debt.
• Not knowing the total amount you owe.
  
• Experiencing feelings of anxiety and stress whenever you use your charge cards.

If you need help with debt consolidation, DON’T deal with any of the commercial companies set up to “help” you with this. They will help you right out of a percentage of the money that could be going to pay off your debts, and some are completely unscrupulous.

These non-profits have free debt counseling, debt management plans for which you pay only a small administrative fee. Their websites contain a wealth of educational resources:

Consumer Credit Counseling Service 800-388-2227
http://www.cccssf.org/

Myvesta (Formerly debt Counselors of America) 800-680-3328
http://myvesta.org

To find a local Consumer Credit Counseling Service office:
http://www.debtadvice.org/).

 BANKRUPTCY

Don’t consider bankruptcy lightly, especially now that the law has been changed to make it more difficult to remove the debt burden. Usually a counseling service will be able to help you find another solution.

If you have a large debt with few assets, you are already stretching to make minimum payments, and you have no prospect of increasing your income enough to make regular payments on a reduced amount of debt (for example if you are ill), then it may seem like the only option. Even if you are in this situation, consider how long it might realistically last—is there any way you can hold out until your prospects brighten? This may be a temporary setback rather than the disaster it feels like.

But continuing to make minimum payments on a large debt without taking action to reduce it can actually increase your debt rather than decrease it, especially if you are late in paying any of your bills once or twice and your friendly credit card company raises your interest rates through the roof.

Chapter 7 bankruptcy used to mean that your credit would be in the toilet for at least a couple of years even with aggressive moves to restore it, but at least you were out from under an impossible load and you had an opportunity to start over.

The new legislation passed in May 2005, supported by the same banking interests that irresponsibly push increasing credit limits as a product, makes it more difficult to file Chapter 7, and Chapter 13 basically sets up a payback schedule. You may be able to do better without declaring bankruptcy. The New Bankruptcy available from Nolo Press claims it can help you decide what’s in your best interest.