You can survive a financial crisis whether brought on by loss of a job, medical bills, or living the American Dream. First, you're got to take an honest look at where you are. How far in debt are you? Do you require more medical treatment? Is there jobs available in your area (both ability and geographical)? The answers will determine which way can work for you. If it was simple overspending, then realistic budgeting and/or credit counseling will work. That is if you are determined to get and stay out of debt. If you have a new job or your medical problems are solved except for the bills of course, then debt consolidation may be the answer. If your outlook for getting a job with near the same pay is slim then bankruptcy may be the only answer.

If you think that developing a realistic budget will work for you, the first step toward taking control of your financial situation is to compare how much money you earn against how much money you spend. List your spending in two categories, basic living - food, mortgage, rent, car, and health insurance. Next, everything else. This is where the shock comes. Living is expensive, enjoying it, more so. List entertainment, recreation, clothing. Writing down all your expenses. How did you get here. What are you spending on that puts you in the hole each month. Identify necessary expenses, and determine what can be lived without. Cutting health insurance is a bad gamble that could result in an even worse situation. The cuts have to come from the enjoying part of the list. Eating at home more often. A rental movie instead of the theater. Your public library and bookstores have consumer information on budgeting your money. Also start keeping track of your spending. Use a computer program or even just a written journal and detail everything you spend. You will be able to see your spending habits. With that, you can develop and maintain a budget that will allow you to pay down your debt.

Even before you work on your budget, contact your creditors and ask them if you can work out a payment plan with them to avoid collection procedures. Don't wait until your accounts have been turned over to a debt collector. They won't listen. If you explain the situation and state you want to pay, most creditors will listen. They don't want to pay a debt collector or risk loosing it all by forcing you into bankruptcy.

If you feel you can't, or have tried to, create a workable budget and stick to it or you can't work out a repayment plan with your creditors, consider a credit counseling organization. Most credit counselors offer services through local offices or the Internet. Reputable credit counseling organizations will help you on manage your money and debts, develop a workable budget, and offer consumer education. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. They will also work with your creditors to develop repayment plans. Under the new bankruptcy law, you must seek counseling before filing so if budgeting on your own or working out a payment plan has failed, try debt counseling.