According to a recent study by RealtyTrac, home loan foreclosures in Georgia during 2007 shot up thirty one percent over those filed in 2006. This put the total number of Georgia homes entering foreclosure during 2007 at just under 100,000. This gives our state the dubious distinction of being ranked seventh in the nation in number of foreclosures filed.

In addition, according to a study released by Bank of America, there is an estimated $360 billion worth of adjustable rate mortgages due to reset in 2008. Much of that debt will reset to higher rates than borrowers are currently paying, and this may fuel our nation's current debt crisis.

In the face of these sobering statistics, Atlanta's Consumer Credit Counseling Service has introduced a method for struggling consumers to get their feet back on sound financial ground.

It's called a Debt Management Plan, or a DMP for short. It's for those consumers who are unable to meet their current obligations, and are falling farther into debt.

The DMP is a structured repayment plan which allows the consumer to make one single monthly payment into CCCS. Then the agency distributes the funds to creditors, based on negotiated monthly payment requirements. Creditors who might be reluctant to negotiate directly with borrowers will often cooperate with a non-profit agency like CCCS, hoping to get their borrower back on track.

Certified counselors at CCCS will ask creditors to accept minimum levels of payment and interest, and to forego late fees and penalties during the term of the plan. In doing so, the creditor gains of benefit of retaining a customer and knowing that the borrower is likely to get caught up, rather than falling farther behind.

The term of these plans varies based on the amount of the debt to be repaid and the income of the client, but usually runs between three and five years. The goal is for consumers to emerge with a better handle on their monthly debt load and the ability to go forward making the minimum required monthly payments from their own funds.

According to CCCS, consumers who are experiencing any of the following "trouble signs" might be among the ranks of those who could benefit from considering a debt management plan:

* Using credit cards to cover daily living expenses. With so many credit cards today pushing cash advances, there is a temptation to "charge" a little cash to cover current expenses. But this is a classic warning that you are living beyond your means.

* Making only minimum payments on credit cards, or struggling even to pay that much. Credit card minimums are designed to keep you paying interest almost forever. It's important to try to pay more than the minimum each month if possible.

* Carrying multiple credit cards and rotating their use to juggle balances and manage due dates. This is a delaying tactic designed to "buy time" at a high cost in interest expenses.

* Making payments late or missing payments for more than one month. This is a particular red flag in the mortgage industry, and will likely begin the process of pre-foreclosure collection procedures.

* Charging more each month on your credit cards than you are paying toward the balance. A trend of rising balances is a prescription for financial disaster.

* Credit cards that are at or close to their limit. Carrying a balance near your limit is seen as a dangerous sign by credit grantors, and will result in lowered credit scores almost at once.

* Not knowing how much you owe. It is not unusual for consumers to ignore their credit problems, hoping for an event to change their fortune.

* Receiving collection calls from creditors. Lenders today act more quickly to contact borrowers who have fallen behind. Their hope is that, by contacting you early in a delinquency, they can work with you to put the debt repayment back on schedule.

* Taking out loans or using equity in your home to pay off debt. While debt restructuring can sometimes be a solution to a credit crisis, the overall concept of paying off debt with more debt is a never-ending cycle. Unless the new debt is somehow lower in cost or longer in term, it is unlikely to help your overall debt situation. And the costs of creating the new debt may exceed the benefit.

* A final "trouble sign" would be finding yourself in a situation where an interruption in income would cause immediate difficulty paying bills. If you have already used up any emergency funds you might have had, it may be time to seek assistance now.

The remarkable feature of the CCCS Debt Management System is that creditors, including major institutional mortgage lenders, will often cooperate in the restructuring of monthly debt obligations, hoping that the consumer will once again be a paying customer.

According to CCCS, the most important element to success is to recognize the signs of an impending debt crisis before it hits, and to allow a certified counselor to examine the overall debt and income structure as soon as possible. This would be especially true in the case of an adjustable rate mortgage that is due to reset in the near future.

Home mortgage lenders are today taking unprecedented steps to work with borrowers to allow owners to keep their homes and afford their monthly payments. If you are facing a mounting debt load and you think a Debt Management Plan might be the answer, you can reach Consumer Credit Counseling Service at 1-800-251-CCCS or on the web at cccsinc.org.

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