You've made the huge decision that you are in debt ? for whatever reasons - spending more than you earn, loss of a job, a recent illness, the bills, and credit cards just keep mounting up.

It could even be a little frightening for you and your family.

So, what can you do about it? Get the best debt consolidation plan you can find!

Here is how to start!

* Add up all the money you that you owe. Make sure you include any debt you have to friends and other family members.

* Add up all the credit cards you have and what you owe on them. Remember to include both bank and store credit cards. Include even your tab at the grocery store.

* Add up all the money you make from various jobs. Including your spouse' contribution, if you share finances.

* Add up all the money you need to spend on essentials (rent, mortgage, health benefits, food, clothes, etc) and make a budget. It is easier to create and maintain a budget if you have a computer and Excel. If not, organize yourself in a book form, so all entries stay together.

* The budget tells you how much is left once you've paid the essentials.

* You now know how much you can afford a month to pay down your debt.

Shop Around For A Reputable Lending Institution

* Be sure to lay all your cards on the table ? yes credit cards, everything. It is a good idea to bring the budget you made. It shows the potential lender that you are willing and ready to deal with the challenge.

* Be aware that if you consolidate your debt with a respectable institution you should receive a fair monthly interest rate. You are putting all your eggs in one basket, so negotiate the best possible rate. Remember not to indicate acceptance of any offer until you have had a chance to meet and evaluate all your potential lender's proposals.

* You already know the amount you need, but don't reveal it until the lending institution suggests an amount they think you need. This is to make sure they don't throw more money at you than you need and an amount you are unable to repay. There is no point in making the monthly payment higher than absolutely necessary. Don't fall for the offer of some extra money to spend on things you do not need. The whole idea is to get out of debt as soon as possible.

* Be sure to examine the fine print: if you suddenly start making more money, then you should be allowed to increase the monthly payments. You don't want this debt dragging out. Just double check that your lending partner will allow you to speed up payments. If you are not allowed to accelerate the payments, do not select that lender, but move on and find another.

* Decide the length of time of this loan, and what happens if you should miss one payment. You should scrutinize anything more than a minor late fee or a one time extra interest payment.

Then repeat these steps with two other lending institutions ? and get the best possible plan for eliminating your debt in place.

Please remember that part of your homework before you meet the first potential lending institution is to check the interest and conditions for debt consolidation loans. Check a minimum of five major financial institutions. If you already have a relationship with the lender, an acceptable interest rate is up to 2% p.a. above the primer rate at the time. If it is a new relationship you may have to accept a slightly higher rate. Remember to include credit unions when shopping around. They tend to be more lenient than the banks.

You are about to embark on a very important time in your life. Because debt consolidation can be emotional too, it's important not to lose your negotiation skills. Remember, these financial people WANT your business ? so choose wisely, and choose what's right for you. Get the most, for the least.

Famous last words: Don't fall into the trap of simple replacing many smaller loans with a bigger one, even if you get a better rate. Remember that the purpose is to get rid of debt all together. Not just move it around.