Climbing Out of Debt

"The first thing you've got to do is face up to the problem. You have to ask, 'why did I do that?' " said June Walbert, a certified financial planner with USAA, a Fortune 500 financial services company that caters to military personnel and their families. "But there are people who are not ready to face the music. They think if they ignore it that it will go away. That's not the case. It only gets worse."

Knowing that his problem would not go away, Robinson began attending meetings of Debtors Anonymous, a 12-step program started in 1968 by Alcoholics Anonymous members who wanted to also discuss their financial problems. Founded under the name Penny Pinchers, the organization now has more than 500 regular meetings in the United States and in 13 countries. Like Alcoholics Anonymous, there is a religious bent. The second of Debtors Anonymous's 12 steps is "Came to believe that a Power greater than ourselves could restore us to sanity." The group charges no fees and says that its only membership requirement is a "desire to stop incurring unsecured debt."

Robinson took immediately to the Debtors Anonymous meetings, which quickly taught him that he could not borrow again, ever. He cut up his credit cards. And then he went to work on holding himself accountable and chipping away at his errors. He recorded every purchase he made every day, even if it was a pack of bubble gum.

"What you really have to do is take a deep breath" and start tracking where your money goes, said Clare Stenstrom, a certified financial planner who is advising Robinson. "It doesn't matter what you spend, you need to write it down. People are shocked to see how much money they drop away in Starbucks or lunch."

After acknowledging a problem exists, the next step is to figure out how to stop the financial bleeding. Stenstrom suggests making a budget -- she prefers calling it a spending plan, which sounds less intimidating -- and dividing it into three categories: necessities, livable, and comfortable. You spend money here and there on livable and cut back heavily on comfortable. You move the comfortable money, for the time being, into necessities, and use that money to pay down debt.

Many financial planners say you should take on the highest-interest debt first, then move your way down. But some financial planners, including Walbert, have more counterintuitive advice. She thinks paying down debts with the smallest balances can motivate people to pay the remaining debts faster.

"For a lot of people, debt is a very emotional situation," Walbert said. "Many people find it psychologically pleasing if they take care of the smallest balances first because they are getting to a zero balance faster and they are like, 'Yes, I knocked one out and I can do another!' "

Breaking the Cycle

When it comes to money, not all mistakes are created equal. While many mistakes result from purely selfish choices -- such as recklessly spending on nonessentials -- many people get backed into a financial corner by relying on credit to take care of their family's most basic needs.

J. Eddie Coon, a church administrator in Georgia, relied on credit cards to pay for basic necessities after high out-of-pocket health-care expenses drained his cash reserves. Coon and his family watched as their non-medical bills spiraled out of control. They piled up nearly $16,000 in bills -- much of it on eight credit cards -- and found themselves unable to make the minimum payments.

"We were falling behind so badly that we just had to do something different," Coon said.

After researching on the Internet, Coon contacted Consolidated Credit Counseling Services, a Florida organization that helps financially strapped people manage and pay off their debts.

Consumer credit counseling groups typically operate as nonprofit organizations, helping debtors work out payment plans and lower interest rates with creditors, usually for a small monthly fee of about $10. Once a plan is arranged, consumers make one monthly payment to the counseling organization, which distributes the money to creditors.