resources

Debt means you owe money to someone, such as having a loan or a credit card balance. If you are having trouble paying back your debt, there are steps you can take to help yourself.

Is Debt Bad?

Owing money is not always a bad thing. Paying your bills on time can actually help build and improve your credit history.

Debt becomes a problem when you owe more than you can afford to pay. If you fall behind, you could face legal issues or start receiving calls from debt collectors.

Does Debt Hurt My Credit History?

Debt can hurt your credit if you:

• Owe large amounts on credit cards
• Pay bills late
• Do not pay at least the minimum amount due
• Skip payments entirely

Learn more about how debt affects your credit by visiting Understanding Your Credit History.

How Do I Get Out of Debt?

A good first step is to create a budget. Use our Budget Worksheet and Budget Calculator to get started. 

• Write down how much money you make each month and how much you spend.
• Look for areas where you can spend less.
• Use the money you save to start paying down your debt.

Learn more about how to create a budget by visiting Making a Budget.

Then, contact the companies you owe money to. Reach out before the debt is sent to a collection agency. Explain why you are having trouble paying and ask if they can offer a payment plan. Some companies may let you make smaller payments until the debt is paid off.

What If I Need Help?

If you need help managing your debt, a credit counselor may be able to assist you in creating a plan.

Learn more about how credit counseling works by visiting Getting Help When You’re in Debt.