Debt can feel overwhelming. It can be difficult to think clearly when the bills pile up, late fees accrue and interest adds up. Taking a moment to organize your obligations is important to maintain your assets, avoid paying more in fees and interest, and protect your credit.

A first step in managing your debt is to make a list of all of your obligations. You can list them by current bills due, operating loans (also known as a line of credit; a short-term loan that a business can use as needed to borrow up to a pre-set amount of money) and term loans (lump sum of money repaid over a fixed term; mortgage, auto loan). Consider the consequences of each if payment is delayed and how this will impact your business and/or personal life if you lose something you need, cost to your cash on hand, and effect on your credit. Note when payment is considered late and associated fees.

If you cannot make all your payments, contact your creditors, be transparent and explain the situation.  Ask for their help in alternatives that will benefit both parties. Examples include deferred repayment, reduced totals in exchange for full payment in cash now or a consolidation of debts with a longer amortization that reduces payments. Finally, developing a cash flow plan that tracks income and outgoing cash can help plan repayment scenarios.

Debt Priority Tool  This excel spreadsheet is a tool to help develop a comprehensive list of all outstanding obligations, differentiate and organize secured (mortgages, auto loans) and unsecured debt. The tool can help manage debt and determine repayment scenarios.