2. Chart your path

How far behind in your payments you are can drastically alter your plan of action. "If you're just in the beginning of having this financial crisis and beginning to fall behind, it's really best to work on your own to try to recover," Davidson says.

On the other hand, your options are going to be different with one or two 120-day late payments on your credit report.

"If you let something go all the way to a charge off -- where it's placed with a collection agency -- that will be seriously negative for the full seven years. It is known as 'seriously derogatory,'" says Maxine Sweet, vice president of public education for Experian and author of the consumer credit advice column Ask Max.

A severely damaged report does buy you some wiggle room.

"You can negotiate with creditors, or work with a debt negotiation company or debt counseling company," Davidson explains. "The potential downside is that there could be some damage associated with those programs -- as far as how the lenders chose to report your repayments. But if you're already at that stage, there's not a whole lot that can happen."

Obviously, the hope is that you've caught yourself before that point. Even if you haven't, you will be able to recover with some work and the passage of time.

"People have a lot of options," Dvorkin says. "Unfortunately, they don't realize all their options. Bankruptcy isn't the first option, it's the last option. The first is to juggle the household budget."

3. Put the plan into action -- the dreaded 'B' word

Call it a budget, spending plan or resource allocation; it all comes down to the same thing: "Stop spending," says Sweet. "You can't say I'm in over my head and keep living the same lifestyle. You have got to figure out what you can cut out of your life."

This is the mantra of credit experts. "Stop spending, use cash instead of a credit card," Dvorkin affirms. "Most people's budgets are 15 (percent) to 20 percent fat. You don't need a $4 latte at Starbucks every day. People can do without certain things; do you need 200 satellite channels? Can you get away with 100?"

Wondering where you can start slashing? Here are a few suggestions:

Cable and internet service -- "In most situations, that's $100 per month and for most people those are among the last things they would think of turning off," says Davidson.

Make your coffee at home -- Gourmet coffee drinks are the new daily habit, right up there with cigarettes and alcohol on the list of money-draining vices.

Check your car insurance -- "Adjusting your deductibles or coverage on your insurance" can save money, Dvorkin says.

Get rid of the gym membership and cut out the car washes. Remember, these are emergency circumstances. Research ways to exercise for free.

Skip the manicures and pedicures.