Debt Load

worksheet

1 | MoneyManagement.org

Debt Load Worksheet

If you think that your debt load is preventing you from reaching your goals, start now to reduce your debt. Determine exactly how much you currently owe.

Use the space below to list all outstanding debt, such as credit union, car, student, and personal loans, and any which you have stopped paying. Arrange your accounts in order, from the highest to the lowest annual percentage rate (APR) charged. Do not include mortgage or rent payments.

If you are able to commit extra income to accelerate your debt repayment, add this to the total minimum payments. When one account is paid off, use that money to increase the payment on the account at the top of the list. Make at least the minimum payment each due date on all outstanding accounts and continue this process until all debts are paid in full.

FACT: Ignoring debt will not make it go away. In general, unresolved or untended debt will worsen over time.

TIP: If you are experiencing financial difficulty, be proactive. Contact creditors to make arrangements or seek credit counseling.

Creditor Account Number APR Current BalanceMinimum Payment

Due Date

1

2

3

4

5

6

7

8

9

10

11

12

Total

Debt-to-Income Ratio

worksheet

1 | MoneyManagement.org

How do you determine what level of debt is reasonable to carry at your income level? An easy way is to look at the relationship between your monthly debt and your income. Use this simple formula to calculate your debt to income ratio.

Debt to Income Ratio

Total monthly minimum payments

Take-home income for one

month

Multiplyby

100

Debt-to-IncomeRatio÷ =

Place your information in the blocks below:

÷ =x 100

Example:

Debt to Income Ratio formula:

÷ =If $300 is thecurrent monthly

minimum payment, and...

$3,000 is the take-home income for the

month...x 100

= .10

10.0% is the Debt-to-Income

Ratio

3003,000

Enter your total monthly minimum

payments from Box A on the Debt

Load Worksheet here

A

RELAX — Your debt to income ratio is well within an acceptable range.

BE CAUTIOUS — You may want to reduce your current debt load.

DANGER — You are heavily indebted and should not consider taking on additional debt!

Under 15%

15% – 20%

Over 20%

If the resulting percentage is:

Warning Signs of Credit Crisis

worksheet

1 | MoneyManagement.org

Credit is one of the most important fi nancial tools you have. Used wisely, credit can be a great tool, but mismanaged, credit can cause fi nancial hardship and severe stress. To assess your skill at managing credit and debt, take the following quiz.

Is Your Credit Use Under Control?

1. Are you borrowing money or using credit cards to pay for items that you formerly purchased with cash?

2. Is more than 20 percent of your net income going to pay debts (excludinghome mortgage payment)?

3. Are you paying bills with money intended for something else?

4. Are you dipping into your savings to pay current bills?

5. If you or your spouse lost your job, do you have less than three months’ take-home pay in a savings account?

6. Can you usually make only the minimum payment on your credit cards?

7. Are you extending repayment schedules? (i.e., paying bills in 60 or 90days that you once paid in 30 days?)

8. Are you near, at, or over the limit on your credit cards?

9. Do you take out a new loan before the old one is paid off or take out a new one to pay off an existing loan?

10. Are you unsure of how much you owe (within $50)?

11. Do you habitually pay your bills late?

12. Do you charge more each month than you make in payments?

13. Do you use a cash advance on one credit card to make payments on other credit cards?

14. Has a collection agency called recently about an overdue bill?

15. Are you threatened with repossession of your car, cancellation of your credit cards, or other legal actions?

SCORING

If you answered “no” to all questions, you know how to manage credit well.

If you answered “yes” to any of the questions 1 through 10, you should cut back on credit use and be alert for other signs of overspending. Consider getting help in drawing up a realistic budget.

If you answered “yes” to any of the questions 11 through 15, you may be in serious trouble. Act now to take control of your fi nances and consider credit counseling.

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

1

The Amount of Debt That Is Right for YouBalancing needs and wants with income can be complicated. Many people supplement their income and enjoy a higher standard of living using credit cards, personal loans, and cash-out mortgage refinancing. Unexpected but inevitable financial crises are more difficult to overcome when debt levels are high and there are no savings.

The first steps in keeping your debt under control is to determine the amount of debt that is right for you, knowing your debt-to-income ratio, and under-standing the warning signs of credit crisis.

K E Y T E R M S

Debt-to-income ratio – percent of

monthly income that pays debt

Spending plan – how you will

spend your income

Predatory lenders – lenders that

charge excess fees and/or

interest

Keeping Debt Under Control: Avoid detours

Journey to Financial Security

Payday Loans

Check Cashing Businesses

Rent-to-Own

Sub-Prime MortgageLenders

Pawn Shops

Car Title Loans

Advance Fee Loans and Credit Cards

2

Options for Dealing with Overwhelming Debt ● Avoid new debt● Develop a spending plan● Contact creditors● Credit counseling agencies● Debt consolidation● Debt consolidation companies● Debt negotiation● Bankruptcy● Credit repair

Beware of Easy CreditLenders called predatory lenders employ practices that are not in the best interests of the borrower.

3

(Strings attached)

How Do I Start Over? It can be difficult to get additional credit when you have had difficulty paying bills on time. Review your credit reports to determine what actions may have affected your credit history negatively. Have you taken the appropriate actions to correct any errors on your credit reports? To re-establish credit after experiencing problems, consider the following options:

● Make a large down payment.● Be prepared to pay a higher interest rate.● Ask a co-signer or co-borrower to sign with you.● Use collateral to strengthen a loan request.● Apply for a secured credit card.● Establish a good relationship with your bank or credit union.

Do Not Ignore Student Loan DebtFailure to repay student loans can have severe consequences. If you default on your loans, the default will appear on your credit record and can impact future borrowing power. In addition, the defaulted loans may be turned over to a collection agency, your federal and state income tax refunds may be seized, your Social Security benefit payments may be withheld, or your wages may be garnished without court action.

How to Get Out of Debt FastIf you have made a commitment to yourself to reduce debt, then you are ready to select a plan to recover from debt quickly.

● Make the commitment.● List all of your debts using your most current account statements.● Choose an action plan to reduce debt.● Evaluate your progress and make adjustments on a regular basis.● Contact your creditors and request an interest rate reduction.● Contact MMI and ask to speak with a credit counselor.

Option Pros Cons

Improve Financial Control on My Own

Credit Counseling

Debt Management

Debt Consolidation

Debt Negotiation

Bankruptcy – Chapter 13

Bankruptcy – Chapter 7

4

Low Balance PlanThis method of paying off debt will give you the satisfaction of paying off accounts quickly and reducing the number of out-standing bills you face each month. Each time you pay off an account, it means one less bill that will be due the next month.

1. Identify the account with the lowest balance.2. Each month make the largest payment you can afford to

the account with the lowest balance and continue makingminimum payments on all of your other debts.

3. When you pay off a debt, send the largest payment youcan afford to the next account with the lowest balance.

High Interest PlanThis plan is best suited to people who will get satisfac-tion from seeing a reduction in the balance owed on their statement. If the balance is very high, it will take many months to pay-down the debt; however, this method generally costs less over time than the Low Balance plan.

1. Identify the account with the highest interest rate.2. Make the largest payment you can afford to the account

with the highest interest rate and continue makingminimum payments on all of your other debts.

3. When you pay off a debt, send the largest payment youcan afford to the next account with the highest interestrate, while maintaining your other minimum payments.

What is Best for Me?

To keep debt under control, recognize when debt and credit practices reach a crisis. There are options available to deal with overwhelming debt. Use good money management skills if it becomes necessary to re-establish good credit. Remember to keep debt to a minimum and pay it off quickly.

MoneyManagement.org

Money Management International, Inc. (MMI), 14141 Southwest Fwy., Suite 1000, Sugar Land, Texas 77478. MD License #14-13 (Commissioner of Financial Regulation, 500 N. Calvert St., Suite 402, Baltimore, MD 21202); MI License #DM-0010567; MS Licensed Debt Management Service Provider; NJ Licensed by the New Jersey Department of Banking & Insurance; NY Licensed by the New York State Department of Financial Services; OH License #CS.900028.000; OR License #DM-80009; VT Licensed in Vermont by the Department of Financial Regulation; VA Licensed by the Virginia State Corporation Commission, Bureau of Financial Institutions # DC-36. In Massachusetts, Money Management International of Massachusetts provides services to consumers on behalf of MMI. MMI does not lend money and is not a loan company. MMI provides free counseling and education programs. Clients who choose to participate in a Debt Management Plan (DMP) will be assessed a fee for services where allowed by state law. Fees may be waived based on federal poverty level guidelines. The establishment of a DMP may adversely affect an individual’s credit rating or credit scores, may make it harder for an individual to obtain credit, and nonpayment of debt may lead creditors to increase finance and other charges or undertake collection activity, including litigation. Member of the National Foundation for Credit Counseling and accredited by the Council on Accreditation. Visit MoneyManagement.org/Licenses for a full list of licenses and disclosures. © 2019 Money Management International, all rights reserved. 12_1004c_6 | 05-19

NOT A LOAN COMPANY

© 2019 Money Management International, all rights reserved. 11_1058_09 | 05-191 | MoneyManagement.org

Debt Load Worksheet

If you think that your debt load is preventing you from reaching your goals, start now to reduce your debt. Determine exactly how much you currently owe.

Use the space below to list all outstanding debt, such as credit union, car, student, and personal loans, and any which you have stopped paying. Arrange your accounts in order, from the highest to the lowest annual percentage rate (APR) charged. Do not include mortgage or rent payments.

If you are able to commit extra income to accelerate your debt repayment, add this to the total minimum payments. When one account is paid off, use that money to increase the payment on the account at the top of the list. Make at least the minimum payment each due date on all outstanding accounts and continue this process until all debts are paid in full.

FACT: Ignoring debt will not make it go away. In general, unresolved or untended debt will worsen over time.

TIP: If you are experiencing financial difficulty, be proactive. Contact creditors to make arrangements or seek credit counseling.

Creditor Account Number APR Current BalanceMinimum Payment

Due Date

1

2

3

4

5

6

7

8

9

10

11

12

Total

11_1058_17 | 05-191 | MoneyManagement.org

How do you determine what level of debt is reasonable to carry at your income level? An easy way is to look at the relationship between your monthly debt and your income. Use this simple formula to calculate your debt to income ratio.

Debt to Income Ratio

Total monthly minimum payments

Take-home income for one

month

Multiplyby

100

Debt-to-IncomeRatio÷ =

Place your information in the blocks below:

÷ =x 100

Example:

Debt to Income Ratio formula:

÷ =If $300 is thecurrent monthly

minimum payment, and...

$3,000 isthe take-home income for the

month...x 100

= .10

10.0% is the Debt-to-Income

Ratio

3003,000

Enter your total monthly minimum

payments from Box A on the Debt

Load Worksheet here

A

RELAX — Your debt to income ratio is well within an acceptable range.

BE CAUTIOUS — You may want to reduce your current debt load.

DANGER — You are heavily indebted and should not consider taking on additional debt!

Under 15%

15% – 20%

Over 20%

If the resulting percentage is:

© 2019 Money Management International, all rights reserved.

11_1058_19 | 05-191 | MoneyManagement.org

Credit is one of the most important financial tools you have. Used wisely, credit can be a great tool, but mismanaged, credit can cause financial hardship and severe stress. To assess your skill at managing credit and debt, take the following quiz.

Is Your Credit Use Under Control?

1. Are you borrowing money or using credit cards to pay for items that youformerly purchased with cash?

2. Is more than 20 percent of your net income going to pay debts (excludinghome mortgage payment)?

3. Are you paying bills with money intended for something else?

4. Are you dipping into your savings to pay current bills?

5. If you or your spouse lost your job, do you have less than three months’take-home pay in a savings account?

6. Can you usually make only the minimum payment on your credit cards?

7. Are you extending repayment schedules? (i.e., paying bills in 60 or 90days that you once paid in 30 days?)

8. Are you near, at, or over the limit on your credit cards?

9. Do you take out a new loan before the old one is paid off or take out anew one to pay off an existing loan?

10. Are you unsure of how much you owe (within $50)?

11. Do you habitually pay your bills late?

12. Do you charge more each month than you make in payments?

13. Do you use a cash advance on one credit card to make payments on othercredit cards?

14. Has a collection agency called recently about an overdue bill?

15. Are you threatened with repossession of your car, cancellation of yourcredit cards, or other legal actions?

SCORING

If you answered “no” to all questions, you know how to manage credit well.

If you answered “yes” to any of the questions 1 through 10, you should cut back on credit use and be alert for other signs of overspending. Consider getting help in drawing up a realistic budget.

If you answered “yes” to any of the questions 11 through 15, you may be in serious trouble. Act now to take control of your finances and consider credit counseling.

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

Yes No

© 2019 Money Management International, all rights reserved.

11_1058_20 | 05-191 | MoneyManagement.org

How to Get Out of Debt FAST

If you have made a commitment to yourself to reduce debt, then you are ready

for the Rapid Recovery Plan. This plan will identify the credit card account or loan

to pay off first and the order to pay off your remaining debts. The Rapid Recovery

Plan also helps you to see and feel immediate progress toward your goal. Here

are the steps:

● Make the commitment.

● Analyze the problem to understand how much debt you have. List all of your

debts using your most current account statements.

● Figure the Rapid Recovery Ratios for each debt.

● Devise a consistent action plan to reduce debt by paying off the lowest Rapid

Recovery Ratio first.

● Evaluate your progress and make adjustments on a regular basis.

1. List each creditor, 2. record the total amount still owed, and 3. fill in the minimum monthly payment.

4. Next, divide the total amount owed to a creditor by the monthly payment and fill in the ratio in column 4.

5. If you have credit cards with high interest rates, it is important to contact your creditors and request an interest rate reduction. Many

creditors will reduce your interest rate if you have had a good payment history. However, if you are behind on your accounts you will

need to use extra funds to get accounts current prior to starting the Rapid Recovery Plan. If you are unable to become current on your

bills contact Money Management International (MMI) at 866.889.9347 and ask to speak with a credit counselor.

CreditorTotal

Amount OwedMinimum Monthly

PaymentRapid

Recovery RatioInterest Rate

1 2 3 4 5

Rapid Recovery Plan

© 2019 Money Management International, all rights reserved.

11_1058_20 | 05-192 | MoneyManagement.org

Use the information you have collected to identify the account with the lowest Rapid Recovery Ratio:

Account with lowest Rapid Recovery Ratio: _______________________________________________________

Account with next lowest Rapid Recovery Ratio: _______________________________________________________

Account with next lowest Rapid Recovery Ratio: _______________________________________________________

● Each month make the largest payment you can afford to the account with the lowest Rapid Recovery Ratio.

● Continue making minimum payments on all of your other debts.

● When a debt is paid off, send the largest payment you can afford to the next account.

This method will give you the satisfaction of paying off accounts quickly and reducing the number of outstanding bills you

face each month. Each time you pay off an account, it means one less bill that will be due the next month.

There are other ways to pay off debt. Some experts suggest you pay off the card with the highest interest rate first. In

some circumstances this is workable. However, if the balance is very high, it will take many months to be free of that debt

and you will not feel the sense of accomplishment that will help you stick with the Rapid Recovery Plan. By completely

eliminating payments to one account and then another, you will see and feel progress toward your goal, which is important

for staying on track and finishing the Rapid Recovery Plan.

A word to the wise: don’t close accounts that you have paid off. Keeping them open will increase your amount of credit

not in use and may help raise your credit score. At this time be on guard to avoid the temptation to add new charges to paid-

off accounts. Adding new debt will not help you achieve your goal of GETTING OUT OF DEBT FAST.

Rapid Recovery Plan

© 2019 Money Management International, all rights reserved.