Debt negotiation and debt consolidation are the major steps involved in  getting back on top of finances for most of us. Another thing to remember is that if you are also pursuing a debt consolidation loan, many creditors will happily take a percentage off your total debt in exchange for a lump sum payment, especially if your account has been delinquent for some time.

A friend owed Mastercard over $20,000 and when she asked for a reduction in return for full debt settlement, they took 20% off her debt. A $4000 saving is a huge thing – it’s months of repayments saved in one fell swoop.

If you are in credit card debt, the first thing you need to do is rigorously prune your budget. Do away with luxuries such as cable, cell phones and internet or at least reduce your usage to the lowest priced plan. No, you really DON’T need a blackberry. Take a packed lunch to work or school. Go cold turkey on Starbucks. Every cent counts. Think about it – if you have $2,000 in debt today and you are repaying the minimum which is $20, for arguments sake. It will 16 years to pay the balance down, and cost you $2060 in interest payments. Play around with some online credit card calculators and see what a difference you can make by paying extra each month.