Organizing for Debt Payment

You've decided to remove your head from the sand and start paying off your debts. This sounds wonderful, but I am willing to bet that most people have lost track of what they owe to which company. This is a result of being overwhelmed by the debts, refusing to open incoming bills, and ignoring phone calls from debt collectors. The pile of unopened bills on the kitchen table will need your attention.

First, take a deep breath. Prepare yourself mentally because this isn't going to be a walk in a rose garden. It may get overwhelming at times while you are organizing. If this happens, walk away from the table. Take a walk outside. Do the dishes. Breathe. During the process you may begin to feel hopeless. You may wonder if this mountain of debt is conquerable. Again, remember why you are doing this in the first place and take a few deep breathes.

Collect all your unopened bills into one pile. Into another pile place any opened bills or reoccurring payments. The next step takes a bit of time and patience, but it has to be done. Open all of the unopened bills and organize them into piles. If you have 5 bills from Dr. Fred place all Dr. Fred’s bills in one pile. Bunny Foo Credit Company’s bills go into another pile.

Once you have these piles in front of you tackle one at a time. No doubt you’ll be seeing repeat bills. Be sure to look at the account number on each invoice. There may be 10 bills from Kick Me Hospital, but some of those bills may be for different services and hold different account numbers. You’ll need to keep one bill for each account that is owed. Check the dates on the invoices and keep the newest ones. Toss all the other paperwork in the trash once you have a single copy of each bill.

Look at you! Well on your way to being organized, you can manage the next step with ease. Purchase an inexpensive 3-ring folder with pockets. Add some loose leaf paper to the inside. Give each debt a page within the folder. Place the name of the creditor on the top line with contact information on following lines. Under that information put your account number and the amount owed. Place the actual copy of the billing invoice into one of the pockets and move on to the next.

As you send in payments to the creditor you can keep track of the payments and new balance on the page dedicated to that particular debt. This saves you valuable time when you desire to make a payment. More importantly you are now in the know about how much you owe and can make better decisions about payment options.