But I also took it a step further, and developed an online program, Debt Diet Online, that launches today on this website.  

Let me give you a bit of history:  Several months ago, I met with Dr. Jim Prochaska, who founded a company called Pro-Change Behavior Systems. Jim explained to me that people go through different stages of readiness before they can change their behavior.  In fact, research shows that up to 80% of people are not ready to take action right away.  This is something I’ve seen again and again in my years of working with people and their money – if you’re not ready to make a change, that change is not going to stick.

So Debt Diet Online, developed in conjunction with the folks at Pro-Change, is different.  Whether you’re surrounded by bills and too overwhelmed to open them, or you’re already in the process of paying down your debt, this program will cater to your stage of change.   You’ll go through activities to help you find your $10 a day.  You’ll learn how to get the most out of that money.  And, once your debt is gone – or if you weren’t in debt to begin with – you’ll learn how to build up a healthy cash cushion so credit cards aren’t your only option in an emergency.

I hope you will take a look at the Debt Diet Online and sign up today!  And if you like it, you may also benefit from Pay it Down, which you can read more about here.

-Lisa, Alabama

Every year the NFCC assists over 3.2 million people who are struggling with their finances. For over 50 years, NFCC member agencies have offered free or low cost services (whether or not you’ll be charged for the help they provide depends on the member agency and the laws in your state) to those wanting to take control of their debt. The NFCC offers confidential help via phone (through their national toll-free hotline), online or in person.

Through credit counseling, the NFCC can help you to work towards paying more than the minimum amount on your bills. During a session, your counselor will address your credit issues and help you find ways to work towards solutions. “Adjusting the budget, decreasing spending and increasing income would be ways to find extra money to pay more than the minimum and get out of deep incredibly sooner,” says the NFCC’s Vice President of Communications Gail Cunningham.

If you’d like the NFCC to negotiate with creditors on your behalf, they can do that through a Debt Management Plan, or it’s commonly known, a DMP. A DMP is essentially a plan to help you tackle your debts. “After a thorough intake of all income, living expenses and debt obligations, if a Debt Management Plan is appropriate for the consumer, the counselor would contact each creditor and propose a new monthly payment,” says Cunningham.

A DMP will set up a payment schedule for you to repay what you owe. You’ll deposit funds with your credit counselor on a monthly basis. The counselor will then send those funds to your creditors. According to the NFCC, when you’re enrolled in a DMP it’s common for creditors to lower your interest rate and halt all late and over limit fees once the new payment has been accepted. “The goal is to allow the consumer to make all of his or her living expenses in full while still addressing debt reduction,” says Cunningham.

While the NFCC can help you figure out ways to pay more than the minimum and help you to craft a Debt Management Plan, helping you with your equity line debt isn’t something they can do directly. Typically, NFCC Member Agency counselors don’t deal with secured debt. The reasoning is they can’t lower the monthly payment on this type of debt. While they can’t deal with it directly, through a counseling session you’ll be able to discuss how you can cut expenses and work towards reducing your debts. “Even though the payment to that specific debt might not be lowered, the budget and other debts might be adjusted enough to allow the equity line of credit to be satisfied,” says Cunningham.

-Kelly, Oldsmar Florida

You’re right-using consumer credit counseling to manage your debts can potentially affect your credit score. What may surprise you, however, is the fact that when your score is calculated using the FICO scoring model, whether or not you’ve received counseling won’t affect your score. “Any notation on a consumer credit report indicating that the consumer is or has been involved in credit counseling is ignored by the FICO scoring model,” says CardRatings.com’s Curtis Arnold.

However, what you do with the advice you get from your consumer credit counselor is another matter. For example, if a counselor advises you to manage your debt or credit cards a certain way, and you follow through with that advice, it could potentially have a negative impact on your score.

One thing is for certain though; getting credit counseling will have much less of a negative impact on your credit than bankruptcy will. “The negative impact of credit counseling is fairly minimal, whereas a bankruptcy has HUGE negative implications. For example, according to Credit Counseling of Arkansas, your score can drop as much as 100 points if you file bankruptcy,” adds Arnold.

If you decide to move forward with credit counseling, a good way to start looking for help is through the National Foundation for Credit Counseling. The NFCC is a national, nonprofit network of counselors whose mission is to help you get out of debt. Through the NFCC, counseling is available by phone, online or by mail. The cost of counseling varies depending on the level of support you need and also on your state’s laws. Most of the time though, you can get counseling at no or low cost. To find a counselor near you visit the NFCC’s website by clicking here.

-Marissa, San Francisco, CA

You’re not alone. With everything that a goes along with college–the classes, the exams, the post-college job hunt–many students fail to pay attention to their loans until their caps have been thrown and the diploma is in their hands.

To get a handle on how much you borrowed and from where you borrowed, you’ll want to visit the National Student Loan Data System, which you mentioned in your question. NSLDS is the definitive resource for finding out about your federal loans. “The only caveat is if the school is a Direct Loan school they might not have finished reconciling their records with NSLDS,” warns FindAid.org’s Mark Kantrowitz. This could be the explanation for the complications you’re experiencing now. Private loans are another matter. You’ll need to get a list of the private lenders you borrowed from and call each to determine the loan amounts.

Once you’ve determined what portion of your loans are private and which are federal, it’s time to start looking at your options for repayment. If you’re doing any postdoctoral internships or residencies, income-based repayment may not be your best choice. “With that much debt and some private, she might need more repayment relief during the residency and internship than income-based repayment can provide,” advises Kantrowitz. Other options may include an economic hardship deferment or forbearance. FinAid’s Economic Hardship Deferment Calculator can help you determine if you’re eligible for deferment. To find out if you’re eligible for forbearance, you’ll need to check with your lender.

If you do decide to go the income-based repayment route, it may be best for you to consolidate your loans before you move forward. “With consolidation she’ll have one federal and one private loan instead of multiple opportunities to miss a payment,” says Kantrowitz. It’s important to note that your federal and private loans cannot be consolidated together, and only federal loans are eligible for income-based repayment.

Why does this interest me?  So many celebs of late have hit the financial skids — Lindsay Lohan, Lenny Dykstra, Stephen Baldwin — it reminds me of a finding in The Difference.  When I looked at factors that held people back from financial success stubbornness was one.  That is not difficult to understand.  If stubbornness defines you, then you’re not likely to conform to whatever task the man (or woman…or corporation) asks you to take on.  

The other, however, was more surprising, and it seems to apply in this case: Creativity. People who defined themselves as completely creative — not just very creative, or somewhat creative — but completely creative, were not likely to attain great wealth.  Why is that?  

David T. Robinson, finance scholar at Duke University and I mulled the research.  And here’s where we came out.  Sometimes very creative people seem to feel they are above all that.  Above all the minutia of bill-paying and record-keeping.  Above the tedious tasks like checkbook balancing that are necessary to get through life with ones credit score in tact.  They– not all but some of them —  think they should be given a free pass as if they’ve given their art to the world and the world should be grateful and not bug them above the little things.

We’ve all known people like this.  Creative types.  Who don’t get as far in life as perhaps we thought they would because they won’t deign to do the dues paying and sucking up that the rest of us did in our 20s and 30s.  I’m not suggesting Annie  (or Lindsay or any of the other truly talented individuals on the list of the financially fallen) do that.  Merely that they recognize that getting by financially is an item on the check-list of life in this day and age.  And if they want to be able to continue to create, it might be a good idea to hire someone to handle the mundanity of it all.

Personally, I know a few people who would jump at that kind of a job.

-Nancy, Texas

Once you’re out of the red and have all your cards paid off, closing the accounts isn’t the best route to take.

If you close the accounts, there are a number of things that could potentially happen make for less than perfect financial circumstances. For one, you’ll be forced to use cash, checks or debit for all of your purchases. “They’ll lose access to the capital, have to live a cash or debit lifestyle, which is not as good as people make it out to be,” says Credit.com’s John Ulzheimer. Also, depending on how you cancel your cards, your credit score may take a hit, which will make it harder to obtain credit in the future for loans or other high ticket items.

If you have the ability to pay off the $45,000 in debt that you owe, my guess is that you’ve learned your lesson about how to use and how to not use credit cards. Instead of canceling your cards, keep them active and use them sparingly. “Leave the cards open, use them occasionally and pay them in full each month,” suggests Ulzheimer. This will ensure that your credit score won’t take a hit, and you can continue to build your credit. Is having the cards in your sight too much of a temptation? Cut the cards up, but still leave them open to ensure that your credit score isn’t hurt by a cancellation

I also am a customer of Chase. I have never paid late in 30yr. They have just raised my monthly minimum payment from 2% per month to 5% per month, an increase of 250%. My interest rate is fixed at 3.9%. After reading the previous blogs, I’m not sure if I should call them or not! Does anyone else have other reports on how they have been treated on this type of problem? Is this problem only been occurring with Chase or other banks as well. Obviously they found the loophole that I missed in all the fine print!

Before you resort to calling — and we’ll talk about that in a moment —  I want you to try to think of this as a gift rather than a punishment (and I know it feels like a punishment, with a credit card this cheap, the temptation is to use it for all expenses you have to carry.)  But let’s say you have $10,000 in debt on that card.  If you pay it off at 2 percent a month — at the 3.9% interest rate without charging anything else — it’ll take you 55 months. BUT if you can come up with the $500 it takes to pay the 5 percent a month, you’ll get out in 21 months. And save a boatload of interest in the process.

What if you can’t? What if it’s impossible to come up with that $500 a month?  You simply don’t have the cash and you don’t have a way to get it?  Then you call and you tell them that and try to negotiate something in between.  Understand, they may cancel your card as a result (that’s their prerogative) or only be willing to cut the minimum so far or say no. But it’s better for your long term financial health if you can rob from the various Peters in your life to pay this particular Paul.

1. 125% Loan To Value

One of the big frustrations I’ve heard about — from some of you indeed — in the attempt to refi a mortgage because you’re feeling squeezed by the payments is the inability to qualify for the Making Home Affordable plan.   As originally drafted, it was tough.  Your loan not only had to be underwritten by Fannie or Freddie but you could owe no more than 105% of the appraised value of the home.  Due to the fact that people overborrowed to such a great extent and home appraisal values had fallen similarly, that was a high bar to scale.  Well, it’s been revised.  Now you can owe up to 125% of the appraised value.  CNBC covered the story pretty comprehensively here.  The bottom line: If you’ve tried and failed, try again.

And note: Mortgage rates fell again this week.  The 20-year-fixed rate loan is back at about 5.3%.

2. Income-based student loan repayment

This morning’s New York Times has a chilling — and infuriating — story about a guy who is being blocked from joining the bar and practicing law (even though he passed the exam) because the committee doesn’t believe he’s made enough of an effort to repay his $400,000 student loan debt.  Let’s just acknowledge that the debt is out of control.  In part that’s because he doesn’t seem to have attempted to dig out.  In part it’s because he seems to have had a medical issue that pushed his loans into deferment which added another $100,000-plus in interest alone to his total.  (This, by the way, is a big problem with deferment.  I ran some numbers and deferring a $40,000 debt for three years can leave you with a  $51,000 tab.)

Let me just say, however, I’ve seen worse.  And one of the big reasons people take on so much in student loan debt is because they believe — or perhaps believed is the better tense — that big salaries would automatically follow.

But what if they don’t?  The income-based repayment option on federal loans, new July 1, from the government can help.  It’s available to people if their student loan payments are equal to more than 15% of their discretionary income.  (That’s defined as the amount by which your income exceeds 150% of the poverty line for your family size.)  Anything you don’t pay because your payments are cut will be tacked onto the end of your loan.  If you haven’t paid off the entire balance at the end of 25 years, anything remaining will be forgiven.  To figure out if you can benefit, use this calculator at finaid.org.  (Note, they also have a calculator that can show you how a deferment can add up.)