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Get Rid of Debt

Is your credit past coming back to haunt you? Our Personal Finance Expert shows you how to turn over a new leaf.
July 24, 2000

Q: In college, I didn't realize the value of a dollar or that of my own credit, and now I'm paying for it. I have two dilemmas: All of my creditors want to be paid back at once (a total of more than I make), and even if I had the money to pay, getting on top of my credit rating and fixing it is a full-time job. Can you point me in the right direction?

A: First, lest you think you're alone in this financial fix, rest assured: This month, I've received three inquiries on the subject of credit, its uses and misuses. So whether you're charging like the Light Brigade or you're ready to pay but can't get out from under a lousy credit rating, owing your soul to the company store is no fun at all. If you'll have problems paying off what you've purchased and have exhausted all your relatives (on second thought, you may want to avoid that route), you can:

That's what to DO. Now, here's what NOT to do:

For more information on managing credit, check out these resources:

1. Downsize Your Debt (Penguin Books) by Andrew Feinberg

2. Money Troubles: Legal Strategies to Cope With Your Debts (Nolo Books) by Robin Leonard

3. Invest in Yourself: Six Secrets to a Rich Life (John Wiley & Sons) by Marc Eisenson, Gerri Detweiller and Nancy Castleman

Or visit the, a nonprofit, Internet-based debt counseling agency that helps families and individuals with debt, credit and financial difficulties.

Whatever you do, don't let your bills get you down. Just because you've spent too much money doesn't mean you're a bad person or that you'll never come up for air. Reducing debt has a lot to do with how you think of money. Some advisors suggest you treat your money with respect-turning all the bills the same way and neatly placing them in your wallet. I don't care if you fold them in gently or stuff them in madly-just as long as you keep them there.

Lorayne Fiorillo is a financial advisor and senior vice president at a major brokerage firm. She spent six years as the on-air financial commentator for EyeWitness News and 11 years as a market commentator for National Public Radio. She is the author of the new book, Financial Fitness in 45 Days: The Complete Guide to Shaping Up Your Personal Finances (Entrepreneur). She specializes in retirement and business planning for small businesses.

The opinions expressed in this column are those of the author, not of All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.