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Escaping Debt

About three years ago the 63-year-old, a retired nurse had racked up about $13,000 in credit card debt. He had a house payment and car payment and so many credit cards he couldn't keep up with everyone he owed. ``I couldn't catch up,'' he said. Finally, with collectors after him, he went to to get help. They put him on a payment plan, helped him cut up his credit cards. And in two years, he paid off his credit card debt. He also saved money and started mutual fund accounts for his grandchildren. ``People don't realize what debt will do to you,'' Mr. Southall said. The non-profit organisation has said that a rash of people have called to get help over the winter holidays, but whether that means more people are in financial trouble or they're less comfortable about their financial situation is hard to tell.

Financial planners are divided on what to do about debt.Most say it is something you don't want to have, although a few say that holding long-term debt -- 30-year home mortgages, for example, can work to your advantage because of inflation and tax minimizing deductions. Buying as home at 1969 prices, for example, is a lot cheaper than getting one at 1999 prices, and deducting mortgage interest over 30 years can have a significant impact on taxes you owe.