Managing Your Money : What to Do When Your Debts Get Out of Control : If you think you’re about to go under, you probably are.

If the 1980s were the age of debt, the 1990s may be called the age of de-leverage. From the largest corporations to families and individuals, everyone is looking to slash debt levels that during the 1980s were growing out of control.

U.S. consumer debt in the first quarter of this year was $782 billion, or about 16% of personal income, the Federal Reserve Board says. That’s about $3,100 for every man, woman and child in America.

One symptom of all this debt is the number of people seeking to ease it. Gary Stroth, executive director of Consumer Credit Counseling Service of Los Angeles, a nonprofit group formed by creditors to help highly leveraged consumers, says he expects that 17,000 people will use the office’s services this year. Last year, 12,000 sought help.

Here are some questions and answers about too much debt.

What are the early warning signs?

If you think you have too much debt, you probably do. One sign is that you aren’t paying off your credit cards in full. Credit-card issuers charge rates as high as 20%, so few investments are as bad as maintaining large balances on credit cards.

“No rational person would pay credit card rates voluntarily,” said Chicago lawyer Kenneth Winter Bley, co-author of “Getting Out from Under,” a book about shedding debt.

One rule of thumb offered by Consumer Credit Counseling is that you’re in trouble if the amount of income you devote to paying credit cards and personal loans (include your car loan here but not mortgage, rent, food and utilities) exceeds 25% of your take-home pay.

How do I know things are reaching the critical stage?

In general, you have a critical problem if one or more of the following is true:

* You borrow to pay for food and utilities.

* You barely make minimum payments on your credit cards, and make no real progress in paying down principal. (Minimum payments are usually about 3% of your credit card balance, a little more than half of that for finance charges.)

* You charge up to your limits and don’t pay it off.

* You put off important medical needs because of the cost.

* You have no emergency funds.

Is consolidating my debts into one lower-interest loan the answer?

This results in lower monthly payments but can be trouble for these reasons:

* The lender may want to make it a secured loan (as opposed to your credit-card borrowing, which usually is unsecured). If you can’t pay off the debt, you can lose your home or other assets. Many scam artists have been preying on people with high debts in an effort to get control of their assets.

* The consolidated loan can give you a false sense of security because your credit card balances shrink to zero from their previous highs. That prompts many people to start charging again.

* Lowering the payment won’t do much good if it is still more than you can afford. You should seek to lower the payment below what you are now paying all your creditors.

So what should I pay off first?

Excluding food and housing and secured loans that put some of your assets at risk, your revolving credit cards should be paid first. The reason is simple: Credit-card issuers almost always charge sky-high rates.

What are the non-essential expenses that can add up fast and get me into trouble?

Experts almost always cite purchases of fashionable clothing as one of the chief culprits.

To a lesser extent, spending on expensive vacations, restaurant bills and entertainment-related consumer electronics gear are contributors as well. Long-distance telephone bills can also add up fast.

How can I keep from charging too much?

One suggestion is to deduct from your checking balance every charge you make as if you just spent the cash. This requires discipline in keeping a checking balance current.

Another method is to use only one credit card, preferably the one with the lowest interest rates, and keep a running total.

When do I stop paying off my debt and start saving?

It’s generally best to wipe out most, if not all, of your credit card debt first. The finance charges on your card debt are so much higher than the rates you receive on savings that many experts suggest that it’s by far the best investment you can make with your money.

Should I have a budget?

Yes.

Will it do any good?

No. For most people, budgets are like diets--they don’t work.

People underestimate expenses and overestimate income. They also lack discipline to stick to the budget.

In addition, estimating expenses months in advance is difficult because of unexpected spending on such things as car repairs, emergency medical bills and other large expenses.

“A pebble hit my windshield today, and I don’t know what it will cost to fix,” attorney Bley said. “I didn’t budget for it.”

That doesn’t mean you shouldn’t have a budget. But try to be realistic.

Can I cut my basic living expenses?

Most people have some fat to cut but not necessarily a great deal. Shopping for sales, carrying lunch to work, cutting electric bills by using the air conditioning less and spending less on clothes, telephone calls and other items can help.

But it also takes more time than you may have to effectively monitor and pay attention to those things. And many times the money saved is dwarfed by overall expenses for insurance, health care, child care and other costs.

Are there other ways to cut debt?

Selling unneeded assets and using the proceeds to pay down debt can help. The extra television set, the bed stored in the garage or other assets may have value.

Let’s look at the big picture. Is there any way I can make a major change?

Sure. Question your lifestyle. Make a list of goals and what it costs to achieve them, another time-consuming chore many people don’t want to tackle.

Is the expensive apartment or house necessary? Or will a smaller one in a less prestigious area do? Should I look for a better-paying job? Should I give up my privacy by finding a roommate? Should I buy a cheaper car? Can I get a job in my profession in an area of the country where the cost of living is much cheaper, yet still make a decent wage?

Changing a lifestyle may be especially hard for those whose jobs depend on making an impression. Lawyers often feel the need to wear expensive clothes to impress clients. Executives may feel pressure to live in exclusive areas. Single people may feel pressure to spend on the latest fashions or frequent expensive restaurants.

What sort of cushion should I have?

One goal many experts suggest--but admit it’s unrealistic for most people in lean times--is to have six months earnings stashed away. This should be enough to cover unexpected expenses, such as a large medical bill, or a cutoff in income because of a layoff or injury.

A more realistic notion is to put aside three to six months pay. And try to set aside money early for large expenses, such as Christmas gifts.

How much should I worry about my credit rating?

Some experts believe that a damaged rating takes years to fix and that a good rating is essential, especially because lenders have grown more cautious.

But others, such as Bley, say people worry about it too much. He says a worsening credit record won’t hurt your existing credit, such as your mortgage and your credit cards. He also says bad credit records can be fixed if you get your finances in shape.

What if it appears hopeless?

Try talking with creditors to see if they’ll give you breathing room. Lawyers who represent people with large debts say cooperation varies; local stores and banks are typically the most flexible, while large national credit-card issuers are the most inflexible. Lenders on homes are often willing to be flexible because foreclosing and reselling a home is costly.

You should also enforce your rights. Lawyers say many finance companies fail to follow proper procedures in sending notices to borrowers when repossessing and reselling cars or other secured assets.

Finally, there is bankruptcy court. Filing will be a blot on your credit record, but it can give you a chance to get your life back in order if there’s no other alternative.