An old proverb goes like this: "The best time to plant a tree is ten years ago. The second best time is today." That not only holds true for tree planting, but for making changes in how you deal with credit card debt as well.  Too often consumers who are dealing with significant levels of debt feel overwhelmed by their situation, unsure if they can ever get control again. Regret and guilt are common feelings, too - "How could I have let this happen? Will anything I do make a difference now?"

To paraphrase another wise saying, "A long journey starts with a single step." What seems impossible can become manageable when you break things down to make small but effective changes in your financial life. Here are some practical steps to shake off that debt paralysis and get started on your journey to a debt-free life today:

• Think this is happening to you?  Start by reviewing your financial situation (with help from a trusted source, if you need it) and set reducing debt as a goal.
• Look for ways to free up more money to pay down your debt. Track your spending and write out your monthly expenses. Create a spending plan (otherwise known as a budget) which includes your debt-reduction goal. Prioritize your expenses now and see if you can cut back on some of the less important items. Involve the whole family in making changes.
• Identify how you are using credit and make changes. Don't use credit to supplement your income. Establish an emergency fund. People who have a rainy day fund are less likely to rely on credit when the unexpected happens. Don't carry your credit card when you shop. You'll be less likely to make impulse purchases.
• Make more than the minimum credit card payment. Credit card statements now tell you how long it will take to pay off your balance if you only make the minimum. That can be a real eye-opener. Even an extra $10 can reduce pay off time by months.
• Create your own debt repayment program. Try to pay a set amount each month on your credit cards and stick to it. As one card gets paid off, put that payment onto the next card with the highest balance or highest interest rate. Keep going until you are putting the entire payment on the last remaining card.
• Look for automatic and easy ways to pay. Once you've identified how much you can pay each month, consider setting up on-line bill paying or direct account withdrawal to make the payments automatic.
• Work with your creditors. If you encounter any problems repaying your debts, contact the creditor immediately and explain the situation. Creditors often will work with you to come up with an alternate payment arrangement for a short period of time.
• Seek help from a credit counselor. If you have been unable to resolve your finances on your own, consider working with a nonprofit credit counseling agency that is a member of the National Foundation for Credit Counseling (NFCC) to create a plan you can live with -one that helps you budget your money and repay your debt.  A certified counselor can customize a spending plan that fits your lifestyle.  There is a way out. To find it, contact an NFCC member agency by calling the NFCC referral line - 1-800-388-2227 or going to http://www.nfcc.org

Kathy Virgallito is the Regional Director for Apprisen Financial Advocates, a national nonprofit credit counseling agency that has been helping consumers manage their finances and get out of debt for 55 years. Services are provided in-person in 10 states through local offices and nationally by phone or via the Internet.  The oldest nonprofit credit counseling agency in the country, Apprisen Financial Advocates is known in its local communities as Consumer Credit Counseling Service (CCCS).  For more information call 800-355-2227 or visit www.apprisen.com.

It seems like you can’t turn on the television or the radio without hearing advertisements from companies that promise to settle your debts for 50 cents on the dollar. It’s an attractive offer, especially if you, like many consumers, are struggling with your finances. There are organizations that may be able to help you, but using a debt settlement company could be a trap that will leave you deeper in debt instead of eliminating your debts.

In debt settlement, you are instructed to make monthly savings payments, usually to a special bank account, until there is enough to make a lump-sum settlement offer to your creditors. But while you are putting money into your account, the debt settlement company is taking its fee out. Saving to try to settle one debt can take a year or more, and since most people typically have multiple debts they want to try to settle, the process can take three or four years. However, debt settlement companies usually take out all of their fees, ranging from 14 to 20 percent of the total debt, within the first several months of the contract. For debts totaling $20,000, you could pay fees of $2,800 to $4,000.

In fact, debt settlement companies usually collect most or all of their fees from consumers long before they have eliminated any of their debts. There is no guarantee that your debts will be settled, and you’ll pay regardless of whether they are or not. It’s hard to save up enough to make a settlement offer when a significant amount of your savings is being siphoned off to pay these fees. That may be one reason why the drop-out rate for debt settlement services is so high. A study of one company’s customers revealed that 60 percent had cancelled within 5 to 6 months after starting debt settlement. Claims for success rates can be very misleading because they often don’t take into consideration the cost of the fees consumer pay or the size of those debts that are never settled.

Another thing that many consumers may not realize is that using a debt settlement program doesn’t stop debt collection and could make their debt situations worse. Debt settlement companies often don’t contact the creditors for months, and creditors are not obliged to deal with them. Some debt settlement companies even tell consumers not to have any contact with their creditors and to stop making any payments to them in the meantime. As a result, the consumers’ debts increase because of interest and penalties, and they may end up being hounded by debt collectors, sued by their creditors, having their wages garnished, and left with ruined credit ratings.

Consumer Federation of America, Consumer Action, Consumers Union, and the National Consumer Law Center have issued tips for consumers in both English and Spanish on how to avoid the debt settlement trap and get real relief. The first step is to resolve your debt problems with your creditors directly, but if that doesn’t work, a nonprofit consumer credit counseling service can give you advice and may be able to make payment plans with your creditors. There may be a small fee for the counseling service to administer the plans, but you’ll be paying with the certainty that you are actually paying down your debts and not just throwing money out the window.

Consumer Federation of America and several other groups have also urged the Federal Trade Commission to crack down on abuses by debt settlement services and companies that offer other types of debt relief, such as lowering consumers’ interest rates. In our comments to the FTC we said that for-profit debt relief services should not be allowed to ask consumers to pay more than a very small set-up fee until they have accomplished the results that they promised. If you’re looking for a debt settlement service, find one that only charges when it has actually settled your debts. If you need help dealing with your mortgage payments (which debt settlement companies don’t address) find a certified local housing counselor who can advise and assist you.