Is your family in debt?

The first step is to analyze exactly how serious the problem is.

Are you putting your monthly expenses on a credit card because you lack cash for everyday expenses? In that case, you must increase your income and/or cut expenses immediately -- enough to make a credit card unnecessary.

Can't manage to do it? Time to seek help.

One source to consider is the National Foundation for Credit Counseling, Silver Spring, Md., at www.nfcc.org. Phone: 1-800-388-2227.

Lenders warn, however, that a contact with a debt counseling service could result in a notation on your credit report, even though it is not factored into your credit score.

Down the road, this notation could hurt your chances of qualifying for a loan. So before meeting with any debt counselor, try to confirm that your initial counseling session won't be reported to a credit bureau.

Often, credit counseling agencies will help you develop a debt repayment plan. They'll likely require you to make your monthly payments to them and may charge a fee upfront and/or in the payment.

Before signing onto a debt management plan, always get a written agreement. Review the price, services to be performed, how long it will take to complete the plan and the company's business name and address.

Always call creditors and confirm the counseling organization is making timely payments.

If your debt problem is not as serious, you may be able to handle it yourself.

First, it never hurts to ask a lender to lower your interest rate. Interest rates typically are not reported to credit bureaus, so a lower rate won't affect your credit score.

Check into refinancing your mortgage. Unfortunately, credit is tight right now. But we've seen reports that small community banks, savings institutions and credit unions still may be willing to refinance a mortgage. Shop extensively.

Think you might soon be in hot water? You might be able to get a loan modification. Major lenders, such as Citigroup, Bank of America, Washington Mutual and IndyMac Bank, have started doing this for customers. But beware that a modified payment could be noted on your credit report. This could lower your credit score quite a bit.

If you must go this route, aim for a fixed rate rather than an adjustable rate. Try not to extend your term. See if the lender will consider eliminating some of your debt as part of the deal. Always ask your lender to refrain from reporting a loan modification to the credit bureau. This is within a lender's discretion.

To cut your debt, write down your monthly income and expenses. Determine what you and family members can do to increase income or cut expenses.

Be sure to set monthly targets for each. Each month, review how close you are to meeting the amounts you have targeted. Then analyze what more you can do to free up money.

To cut your debt, take this action:

• Cut up your credit cards, or put them in a drawer and stop using them.

• Free up as much money as possible by setting up a spending plan. Save at least $50 to $100 per month if possible, and route it toward increasing your monthly credit card or loan payments.

Pay off your highest interest rate credit card or loan first. (Feel free, if it's easier, to start on the card with the lowest balance instead.) Once you've paid off one card, double up on your monthly payments on another card or loan.

Be advised: Don't close unused credit cards and avoid, if possible, shifting balances to another account. Having fewer open accounts may lower your credit score.