First Person: Should You Use a Credit Counseling Service?

With the rising unemployment rates, more consumers are finding themselves in debt. Some consumers may feel like their mountain of bills is insurmountable. If you are one of these individuals, you may be tempted to call one of the credit counseling agencies that advertise on TV. But, is that in your best interest?

Credit counseling services promise quick results with little effort on the client's part. These agencies charge a fee and work with your creditors to make payment arrangements and reduce or eliminate your debt. It can be a huge relief to give your bills over to someone else and relax while they handle the headache. You simply make one tidy payment to the consolidation agency each month, and they dole the funds out to your creditors. Simple, right?

In reality, these agencies don't do anything you can't do yourself with a little time and a few phone calls and letters. You simply need to sit down and make a plan to pay off your debt and then take action. Make a list of your debts. Put any bills that are overdue at the top of the list. Pay them off as quickly as you can - sell things if you have to, or get a part-time job if you are able. While you are working on paying them, call your creditors and let them know what is going on. If you are making a good-faith effort to pay them, many lenders will be willing to work with you.

Then, throw $1,000 in a savings account. It can sound like an insurmountable task if you are in debt, but save up your pennies while you pay your minimum monthly payments, and your savings will add up in no time. Once this is done, begin paying your debts off. Chip away at the smallest bill until it is paid off, then work on the next one. Repeat until you are debt free.

In 2004, my spouse and I found ourselves to be in about $50,000 worth of debt. It seemed hopeless! My husband started listening to some crazy guy on the radio, while I laughed at him for buying into the self-help craze. One day I sat down and listened to this "finance guru" with my husband, just to see what all the fuss was about. I was hooked! The man on the radio was Dave Ramsey, and everything he said made complete sense. We sat down and made a list of our debts, assets and income, and made a plan to pay it all off. Within a couple of years, we had everything paid off but our mortgage, and we are currently working on that, so soon we can call Dave and shout "We're DEBT-FREE!" If you feel like you are drowning in debt, find Dave's show on your local radio or pick up a copy of his books and start changing your life. You, too, can be debt-free and have the coveted FICO score of "0" like many others who have vowed to stop using credit forever.

More from this contributor:
Charge Off and Bankruptcy Basics for Consumers
Tips For Paying Off Your Holiday Bills
How to Gain Instant Access to Funds Using the Paypal Debit Card