When you’re sick and you go to the doctor’s office, the first thing he or she asks (when the doctor finally gets to you) is usually something like, "So, what seems to be the problem?" That’s when you get to describe your symptoms so that the doctor can start figuring out what medicines to prescribe and what other treatments to recommend.

Debt trouble is a lot like being sick. The problem is that many people can’t or won’t admit to themselves that they have this particular illness until they’re already in the financial equivalent of a critical condition. What could have been handled in the early stages with a few simple preventative measures now requires an emergency-room visit, followed by admission to the financial ICU.

Eventually, of course, one way or another, debt trouble will reach the point where it can no longer be ignored. If you’ve finally concluded that you’re in real trouble, congratulations!

I really mean that. As anyone who has ever been through a recovery process knows, the first step to solving a problem is admitting to yourself that you have a problem. The one advantage of debt trouble is that it won’t allow you to ignore or deny it forever. Your creditors will, without fail, remind you repeatedly that there is a situation developing that must be addressed; and, eventually, action will be taken—either by you or by them. Here we'll look at how to go from being a passive, avoidant victim of debt to being a proactive, confident debt survivor. Here are five things to do right away.

Stop the Bleeding

Going back to our medical analogy: When you go to the emergency room, the physicians there use a process called "triage", which involves assessing your situation and those of the other patients to decide what the most critical need to address first is. If you have a fever and the guy next to you has blood squirting from an artery, they’re going to take care of him first. And, if you have multiple symptoms ranging in severity, they’re going to treat the most life-threatening symptoms first and leave the others alone until you’re stable enough that they can get to them.

Right now, you need financial triage. And if you’re bleeding to death financially, the first thing you need to do is to apply a tourniquet so that you can buy enough time to address the underlying issues that got you in trouble in the first place. We’ll start with the most severe conditions and work our way down from there.

1. Delay Foreclosure

For most of us, losing our home to the bank is probably the thing we fear the most, and with good reason. Our house is usually the single largest and most valuable asset we have. Not only does it provide financial benefits, but it also affords shelter—both physical and emotional. If you’ve reached the point where your mortgagor is threatening or has initiated foreclosure proceedings, then that’s the first thing you must address.

Communication is your most useful tool as you work your way out of debt. Now is the time to begin using it. Call your mortgage lender and tell them about your circumstances. Have you lost a job or had your hours drastically reduced? Has a serious illness cut into your income or generated medical bills that have caused you to fall behind? Has a divorce and its attendant court-ordered alimony or child support payments impaired your ability to stay current? Tell your lender.

Believe me, the lender does not want to foreclose on your home; foreclosure is expensive and time-consuming. If you are honest and forthcoming in your explanation, your lender will almost always work with you on a reasonable plan to help you get current.

The important thing to remember is that your lender wants to hear from you. Their favorite form of communication is a full payment received on time, but if that's impossible for you, by all means, communicate in some fashion. A call from you explaining your circumstances and asking for additional time to work things out is vastly preferable, from your lender’s perspective, than no communication at all.

An important note of caution: Don’t allow your panic over possible foreclosure push you toward responding to one of the many scams that promise to halt foreclosure. These fraudulent schemes use phrases like, "We can save your home," "Stop foreclosure now!" "We guarantee to save your home," and other claims. Some will even offer a money-back guarantee. The problem is, by the time you realize that they aren’t going to do what they promised, your money—and, sometimes, what is left of your equity—has vanished, along with the guarantee.

2. Stall Repossession

Following closely behind our homes in importance are our automobiles. Usually, car payments are second only to house payments in our chart of monthly expenses. That’s not surprising, because for most Americans, the car provides transportation to and from our places of employment and also gets us or our kids to school, to church, to friends’ houses, etc. It’s impossible for me to imagine what my life would be like if I didn’t have my vehicle constantly available to take me where I needed to go. I’m sure your life is much the same.

If your debt troubles have become severe enough that your lender is taking steps to repossess your car, there are some things you can do to give yourself a little more time as you form a plan for getting out of debt. Here, again, communication is at the top of the list.

While repossession of a vehicle is easier for a lender than foreclosure on a mortgage, it is still a costly process that the lender would much rather avoid if he/she thinks there is a reasonable alternative. Call your lender and explain your situation. If you can send them even a partial payment, let them know that. If you’ve fallen on hard times, give them specific information, especially if you think you’ll be in a better position in the future. As I will emphasize again later, if you agree to sending a payment or even to something as simple as calling back in three days to give them an update, follow through. Consistent, honest communication from you may not keep your car safe from the tow truck indefinitely, but it can certainly buy you a bit of time as you begin working on your personal financial recovery plan. And, right now, a little time and breathing space is your greatest need.

3. Deal with Creditor Calls and Mail

Creditor calls are no joke, especially if they’re contacting you during working hours. Fortunately, recent laws governing debt collection have greatly improved the debtors’ ability to protect themselves from harassing or threatening calls from creditors.

If you’re fortunate enough to be gainfully employed, the last thing you need is the distraction of creditor calls and the potential embarrassment and/or disfavor with your employer that they can cause. If you lose your job because of creditor calls, that’s only going to make matters worse.

So, request that the creditors cease contacting you at work. This sounds ridiculously simple—and it is—but many people just don’t realize that they have the right to tell creditors to quit calling during working hours. The next time a creditor calls you at your place of employment, simply say something like: "I must ask you to stop calling me at this number during working hours. I am not trying to avoid this debt, but you are potentially jeopardizing my employment. Please do not call me at this number from the hours of [give your working hours] again."

Be courteous but firm, recognizing that the law clearly states that the creditor may not contact the consumer at work if the creditor knows that the consumer’s employer prohibits it. If the calls continue, document the fact in writing; it may give you grounds for filing a formal complaint with the Federal Trade Commission. Trust me: your creditors do not want to fall afoul of this or any other regulatory body.

As a matter of fact, the law states that creditors may not communicate with consumers "at any time or place which is unusual or known to be inconvenient to the consumer" (www.ftc.gov). Times between the hours of 8am to 9pm are presumed to be convenient unless you can prove otherwise. However, you should exercise caution in pushing too hard on this point; creditors who feel they have no other recourse to communicate with a debtor may file a lawsuit that provides specific means for communication between the parties.

4. Write a Cease-and-Desist Letter

Another way to get creditors to stop contacting you is to send them a letter. Again, this sounds like an obvious course of action, but many people are so intimidated by their situation that they never think of simply sending a written demand to cease contact.

Here again, the laws governing debt collection provide that creditors who are in receipt of a properly worded cease-and-desist letter must stop contacting you except for the specific instances allowed by the law:

  • To inform you that they have ceased efforts to collect the debt.
  • To inform you that they may invoke "specified remedies" (which sometimes means a lawsuit).
  • To inform you that they intend to invoke "specified remedies".

What this means to you is that you should probably tread carefully in the area of sending a cease-and-desist letter. Why? Because for some creditors, receiving a letter from you forbidding them to contact you any more—even though it is your legal right to send such a letter—may cause the creditor to conclude that it’s in their best interest to use their legal right to bring a suit for collection of the debt. As you can probably figure out, this is a situation that you want to avoid if at all possible.

While I’m on the topic of mail, let me urge you: if you’re one of the many debtors who have tried to avoid looking at those demand letters that you’ve been getting, start opening and reading your mail. No matter what course of action you eventually decide to pursue on your way to regaining financial health, you have to know where you are before you can figure out where you need to go.

5. Communicate

One of the most important tools you have at your disposal in this task is communication—not only with your creditors, but also with family members and other involved parties. Right now, though, I want to emphasize the importance of maintaining lines of communication with your creditors.

This is especially important if you decide to work directly with your creditors to satisfy the debt. Creditors are much more willing to give the benefit of the doubt to consumers who are honest, forthcoming and respectful in their communications, whether by phone or by mail.

Collection agents spend the majority of their time trying, in vain, to establish contact with debtors. By returning their calls and answering their written communications, you immediately place yourself on a different—and better—list than the debtors who are non-communicative or who otherwise give the appearance of trying to avoid making good on their obligations.

Now, that doesn’t mean that you should agree to all their demands. A collector’s job is to convince you to send money; if you could have done that, you wouldn’t be behind in the first place, right? However, there are things that you can do and say that will encourage your creditor to be more patient with you as you work on a plan for repayment. Chief among these are honest acknowledgment of your responsibility for the debt, maintaining a respectful tone and following through on anything you agree to do, including subsequent communications. I know that the last thing you may want to do is send a follow-up letter to a creditor or take a phone call from a collector, but sometimes a bit of time spent in communication with the creditor can pave the way to an easier path out of debt. It can also sometimes help to keep you out of a lawsuit.

This article is an excerpt from Mitchell Allen’s A Survival Guide to Debt.