Wednesday, Jan. 2
Posted 2 p.m. EST

Your debt resolutions

Welcome to a new year when you will finally reduce your money troubles and handle that debt.

I hope my blog entries have helped and will continue to help you in this journey, and keep you clued in on the latest information in bankruptcies.

Let's get started.

Recently, a single mother shared her struggles with debt, saying that she feels as though she has been in a recession for two years.

"I thought I was a single mom who was making a decent wage, but for the past two years those wages aren't getting me from month to month. I ended up having to use credit cards to get me through and now those are maxed out. The bills are so high I can't make the monthly payment.

"With the rising prices of gas and food, I still can't handle the monthly expenses of a family of three (myself and two teenage boys) even if I don't pay the minimum on my two maxed-out credit cards.

"I have many medical conditions so a second job is out of the question and my health expenses are outrageous even with health insurance. Prescription costs are outrageous, but don't make a dent compared to the 20 percent of hospital bills owed after my insurance pays the first 80 percent. Oh and by the way, co-pays and deductibles are increased in 2008 ... I highly doubt that the chump change raise I will receive will cover the extra costs of medical benefits.

"Even if I wanted to, I don't have the money to file for bankruptcy. Somehow I don't think this is the life I imagined having as a child or as a teenager."

In this case, I would suggest the mother visit a credit counseling agency to help organize her finances. The agency can offer free or affordable assistance. She should review the Bankrate feature "FAQ about debt and credit counseling," which addresses frequently asked questions regarding debt and credit counseling.

She can visit the Association of Independent Credit Counseling Agencies or the National Foundation for Credit Counseling Web sites to locate an agency in her area.

Debt tips

As you draw up your New Year's goals, include the following debt tips provided by the Consumer Credit Counseling Service of Greater Atlanta:

Balance your checkbook each time you receive your paycheck.

Keep your bills in a filing cabinet or a secured box.

Create a monthly spending plan and figure out your monthly income and recurring expenses.

Prioritize your expenses by determining your "needs" and your "wants" (psst … I'm working on this one, too).

Don't be limited to saving for retirement; diversify your savings plan and think about those unexpected expenses such as medical emergencies or car repairs.

Know the signs of debt problems.

Take action. Contact a debt professional.

Share your thoughts at bankruptcyblog@bankrate.com.