However, let’s say that because of illness, or job loss, or a mortgage loan resetting, you have fallen behind in paying your bills.

Debt collectors are not allowed to:

Call you before 8 a.m.
Tell people that you owe money
Threaten to have you arrested
Threaten you in any way
Call you at work if your employer does not approve of their calls to you at work

When debt collectors contact you, to protect yourself:

Do NOT tell them where you work if they don’t know
Don’t give them bank information
Don’t pay them over the phone
Find out their information and do research to make sure they are a legitimate collection agency

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1.) Clean Your Air Filters. When they get clogged with dirt, dust, pet hair, etc., not only does that affect the air quality in your home, it drives up your energy costs significantly. Aim to change your air filters at least once a month.

2.) Find out if your power company will send someone to your house to do a free energy audit.

3.) Hire someone to do an HVAC inspection if you haven’t had one done in a while. Your heating and air conditioning system accounts for about a third of your home’s energy costs and if it is not working efficiently you will see it in your monthly bill.

4.) Do you have an old refrigerator and stove? Those are also major energy guzzlers. When you shop for new appliances, find one that is Energy Star certified. They are more energy efficient than appliances that are not certified.

5.) Check to make sure that you do not have any water leaks anywhere, including outside where you may have a garden hose.

6.) Do your windows and doors have drafts? If they do, every time you turn on your air conditioner or heater, money is literally flying out through those cracks. Money spent now to fix those can pay back many times over in lower energy bills.

7.) Set your heating/cooling system to “auto” rather than “on” – make sure that it shuts off when the desired temperature has been reached.

8.) If you are going on vacation, or going to be away during the day, you don’t need to heat/cool your home to the same level – a couple of degrees on the thermostat can save you a lot of money every month.

9.) Buy energy efficient lightbulbs.

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In fact this is one of those times when spending a little more up front right now can save you a lot in the long run.

Hiring a heating/air conditioning technician to check your unit and make sure that it’s working properly is a very good idea. Your air ducts may need cleaning, coils may need cleaning, filters may need to be changed more regularly…spending $60 or $80 once could save you that much every month in heating or air conditioning bills.

Also, consider your refrigerator – an old, inefficient refrigerator can burn a lot of energy. When buying new appliances consider buying ones that are approved by EnergyStar.

There are some things you can do yourself, for free. Check every single window and doorway for drafts. If there are drafts, fix them; you’re paying to heat or air-condition the whole outdoors!

Change your air filters regularly. Check them and if they look at all dirty, they need to go immediately.

Check for water leaks everywhere, including outside where you may have a garden hose. A little leak can cost you hundreds of dollars in a months time.

Check for continuously running toilets, which can run up your water bill considerably.

And remember that the recommended temperature settings are 78 degrees in the summer and 68 degrees in the winter.

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However when you are in debt and watching every penny it’s important not to pay more for ANYTHING than necessary.

Whatever you are paying for currently, there is almost always a cheaper alternative.

How do you find it? Go back to school. No, don’t sign up for school; go back to trade schools to get cheap services performed by services.

Need your car repaired? Here is a great option that many people don’t take advantage of: local technical high schools or vocational schools. They will generally repair a vehicle for the cost of the parts alone. This can save you a FORTUNE. Labor is usually the biggest part of a repair expense.

If you are nervous about having students work on your vehicle, don’t worry: they always do this under the supervision of a trained supervisor. Think of it this way, they don’t want to botch up the job and get sued, and they want to train their students to repair cars properly.

Call around to find out what options are available in your area.

Here are some more cost saving tricks:

For hair cuts and color, call the local beauty schools to find out when their students give reduced price services. They often also do makeovers and manicures and pedicures.

If you need legal services, while law schools don’t come under the heading of trade schools, many of them offer legal clinics where you may be able to get an hour of free legal advice.

Don’t just rush out and pay far more than you need to get a necessary service or repair. Always look for the lower cost alternative, and you may find yourself saving hundreds or even thousands of dollars every year in fees – money that you can put into, you guessed it, paying off debt.

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However when you are in debt and watching every penny it’s important not to pay more for ANYTHING than necessary.

Whatever you are paying for currently, there is almost always a cheaper alternative.

How do you find it? Go back to school. No, don’t sign up for school; go back to trade schools to get cheap services performed by services.

Need your car repaired? Here is a great option that many people don’t take advantage of: local technical high schools or vocational schools. They will generally repair a vehicle for the cost of the parts alone. This can save you a FORTUNE. Labor is usually the biggest part of a repair expense.

If you are nervous about having students work on your vehicle, don’t worry: they always do this under the supervision of a trained supervisor. Think of it this way, they don’t want to botch up the job and get sued, and they want to train their students to repair cars properly.

Call around to find out what options are available in your area.

Here are some more cost saving tricks:

For hair cuts and color, call the local beauty schools to find out when their students give reduced price services. They often also do makeovers and manicures and pedicures.

If you need legal services, while law schools don’t come under the heading of trade schools, many of them offer legal clinics where you may be able to get an hour of free legal advice.

Don’t just rush out and pay far more than you need to get a necessary service or repair. Always look for the lower cost alternative, and you may find yourself saving hundreds or even thousands of dollars every year in fees – money that you can put into, you guessed it, paying off debt.

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It may be the right choice for you, but it will not automatically wipe away all debts.

Consult an attorney for definitive answers, but here are debts that may still remain after declaring bankruptcy:

Taxes owed to the state and to the Internal Revenue Service.

Child Support

Alimony

Student Loans

Criminal Fines

Parking Tickets

Drunk Driving Injury Awards against you

These are just SOME of the debts that you may still owe after declaring bankruptcy.

Chapter 7 bankruptcy requires that many of your assets be sold to satisfy your debts, and most of your debts will be discharged after you file – but not all of them, as mentioned above.

A Chapter 13 bankruptcy is designed to allow those with a regular income to repay some or all of their debts. It stops debt collection activity and allows a debtor to keep most of their assets. If the debtor earns less than the state minimum, they may have a plan that lasts for three years, and if they owe more than the state minimum, they may have a plan that lasts up to five years. Chapter 13 allows some individuals to keep their homes under certain circumstances.

You definitely will want to consult with a bankruptcy attorney before deciding to declare bankruptcy and before selecting which bankruptcy option is right for you.

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So you are ready to tackle your debt and get control of your finances. Here’s an important question – are you going to do it by yourself or are you going to recruit some outside assistance?

Here’s why you might want to give some serious consideration to getting some help with your budgeting – because whatever you were doing in the past clearly didn’t work.

Now, there frequently are good reasons why people went into debt – a layoff, medical issues, a divorce, the current housing crisis causing mortgages to reset, the recession causing business to dry up.

However, even in those cases, there is generally some poor financial planning to go along with it. Without realizing it, people who go into debt generally failed to put enough money into savings every month to create a decent financial cushion, and also generally  spent too much money on things which they felt were necessities – an expensive car, a big screen TV, DVR, music system, designer clothes, expensive salon treatments, pricey vacations – BEFORE they made sure that they saved up a financial cushion.

So if a person has developed a lifetime of poor habits in spending and saving, it is going to be very challenging for that person to suddenly change completely on their own.

Here are some ways you could bring in outside help:

Ask a spouse, boyfriend or girlfriend, or trusted friend to help, if they are financially savvy and you feel comfortable doing so
Get a financial advisor for a small fee
Consult a consumer credit counseling agency – make sure they have nonprofit status and are certified by www.nfcc.org!
Use financial software such as Quicken or Numbers

You can always try to get out of your current situation alone, but if you are going to do so, you need to take a long, hard look at why you are in debt, and make hard decisions as to what spending habits of yours you need to change. If you show a few months worth of your debit card statements to someone else, for instance, they are likely to spot a lot of areas where you can save money.

You may be spending too much on groceries, on entertainment, on clothing, etc., for someone in your financial situation. A good financial advisor can point this out to you; it may be difficult for you to spot because you are too close to the situation.

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The worst things that you can do to your credit rating

Maintaining a good credit rating is more important than ever in this economy, because loan standards have tightened up considerably. A credit rating that would have been considered good even a few years ago is now likely not enough to get you approved for a home loan or student loan or car loan.

And if your credit rating is below the mid-700s, you are likely to pay higher interest rates on all of your loans.

Here are some things that will seriously harm your credit:

Making a late payment. It is a good idea to send your bills off at least a week before they are due; ten days if possible. One single late payment can drop your credit score by 100 points.

Charging all of your credit cards to the max. Or even just carrying too much debt on them. Do not charge to the limit; try to keep the amount that you have charged to no more than 30 or 40 percent of your credit card balance.

Applying for new lines of credit: This will lower your credit score.

Declaring bankruptcy. This will play havoc with your credit scores for up to 10 years. It is an absolute last resort.

Applying for high interest, unsecured loans.

Closing down old lines of credit. If you must shut down a line of credit do it on your newer credit cards.

Applying for department store credit cards.

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Your credit score – at the very least, check your credit report once a year to make sure there is no inaccurate information on there, but if you can afford it, it’s worth paying for monthly credit checks. That way if there is ever an inaccurate ding to your report you can check it quickly.

Your credit card bills – Read them from beginning to end carefully because credit card companies are doing all kinds of sneaky things these days. They may lower your credit limit, which makes it look as if you’ve charged to the max even though it’s not your fault; they may raise your interest rates drastically if you pay late on ANY bill, not just theirs.

Your cell phone bill – there are an astounding amount of errors on them. You also may be paying for things that you don’t need, like a texting package or internet service that you never use.

Medical bills are also frequently riddled with errors, and guess what, amazingly, they are almost always in the doctor’s or hospital’s favor. Look up Medical Billing Advocates on Google if you think that your medical bill is significantly off; they often will work on a contingency basis.

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Buying a house if you plan to stay there for at least a few years, and if you can get a good interest rate on your mortgage loan, and if it’s not stretching your finances; buying a vehicle so you can get to work or school; student loans so that you can go to school.  Most other types of debt, however, involve luxury rather than necessity.

It’s not a bad idea to have a credit card that you can use in case of emergency, but you need to understand what the meaning of “emergency” is. The need to get a new designer outfit for that upcoming high school reunion is not an “emergency”. And, for that matter, an upcoming holiday or birthday is not an emergency either.

Ask yourself – if you can’t afford to buy a pricey present, or presents, is going into debt to buy them the wisest decision? Because odds are you will NOT have paid this present off by the time the holiday or birthday rolls around next year…and what is going to be different next year at the next holiday? Will you be forced to go into even more debt if you want to buy more pricey presents?

Before you apply for credit or run up your credit card, you ALWAYS need to stop and question yourself as to the necessity of this purchase. Is this purchase contributing to your future and your family’s future wellbeing, the way a house or a college education will? Is it a practical necessity, the way a vehicle is? If the answer is no…it is very rarely a wise decision to take on that debt.

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