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Many Americans are up to their eyeballs in debt. While the news headlines bring us a steady barrage of stories about McMansions, expensive cars, designers duds and cutting-edge technology, we hear tales of woe from our listeners and viewers who also assumed things would just keep getting better - so they bought whatever they wanted and put it on credit cards.

That's not to say all Americans are cavalier about getting into debt. You're probably not that way, or else you wouldn't be visiting Dolans.com and getting our advice about managing your debt. We also hear from people who were forced into debt because of an emergency, or who financed their business start-up by maxing out their personal credit cards.

But the facts can't be ignored: Middle-class Americans are drowning in debt. A study on consumer bankruptcy conducted at the height of the bull market was the basis for the book The Fragile Middle Class - and foreclosures and bankruptcies continue to climb. In 2006, 789,000 people filed for bankruptcy...we're guessing way more than a million in 2007!

The researchers found that some 90% of the debtors filing for bankruptcy at the threshold of the new millennium were a cross section of middle-class America. More than half were homeowners. Their education was slightly higher than the national average. Job losses, medical problems and divorce accounted for about 80% of the bankruptcy filings. Many American families that look prosperous have so many debts they are just one emergency away from financial disaster.

We know, because we talk to people all of the time who are in this situation.

A woman in her sixties called The Dolans radio show to say she wanted to retire and had $53,000 in her retirement account, but $45,000 in debt from credit cards and loans. Talk about a big dose of reality. We told her, point blank, that she would probably have to keep working for years to come in order to pay off those debts.

A man in his seventies phoned in to our show and confessed he had a maxed-out credit card that his wife of almost 50 years knew nothing about. He was worried that if he died before paying it off, she would be saddled with a bill their meager pension and Social Security benefits could never pay.

Consider some scary statistics from CardWeb.com: In 2005 there were 1.4 trillion payment cards in circulation in the United States, including credit cards, debit cards, and store cards, which means an average of around 15 cards for every American household! American consumers currently owe nearly $700 billion on all credit cards and carry, on average, more than $8,000 in credit card debt from month to month.

The actual stories we hear are a lot worse than these statistics. All too often someone calls us saying they can no longer make the minimum payments on three, six, even 12 credit cards.

We'll try to sort out the caller's income and outflow. "How much money do you make," we'll ask.

"$38,000 a year."

"How much do you owe?"

"I'm not sure" is invariably the response we get. What?! (But we're no longer surprised.)

It's a pretty sure bet that you're in trouble if you've lost track of how much you owe.

Card issuers make it sound like a divine romance when they solicit your business, but they never tell you how much it will cost you down the line, in dollars and tears. That's why we're here to help. We've been through it (Ken had $3,000 worth of debts when we got married—the equivalent of a new car at the time!), and we want to help you manage your debt.

The best thing you can do for your peace of mind is minimize your debts before they get out of hand - even better, before they start. And if you are already in heavy debt, it's more important than ever to come up with a plan for digging your way out. We'll show you how to get on the track to debt-free living with the Dolans' Debt Clinic.

The Dolans' Debt Clinic

To get out of debt, you have to start with an honest list of every single debt you owe. Here's a worksheet to help you get started, but be sure to add your own items that we haven't included. Write down the numbers from the last bill you received for each item.

Are you married? Living with a partner? Now that you've listed all of your debts, ask your partner or spouse to do the same and compare notes. Whatever you do, make sure you each know what the other's debts are, as well as what the joint debts are.

Now, how do you get those debts down? We've divided our advice into two parts. Debt Clinic Part I is Debt Management 101, for everybody. Debt Clinic Part II is for those whose debts are out of control. Read both sections even if you aren't in dire debt. Knowing what could happen might be enough to send you tearing up credit cards left and right. That, by the way, is a good thing.

Debt Management 101

Here are the first steps you need to take to get your debts under control:

1. Make more than the minimum payment. An extra $10 a month can make a world of difference. 47% of credit card customers are making only minimum payments on their credit cards. Don't get caught in this trap.

Dolan Smart Money Move: To make sure you get the most bang for every extra buck you pay toward your balances, put the extra money toward the card with the highest interest rate first. (This will actually eliminate your debt faster than paying off the card with the highest balance.)

2. Pay off non-tax-deductible debt first. If you're paying 18% interest on your credit card balance, you'll make a bigger dent in your debt by paying off that nondeductible credit card debt rather than prepaying your mortgage. The same holds true if you prepay–or pay off–a car loan or personal loan (both nondeductible) rather than your mortgage.

3. Prepay whenever possible. To prepay, just send the extra money (or do it online) and specify in a note or as you pay online that the money is to go toward your principal. (Be sure your loan agreement says you can do so without penalty.)

Dolan Smart Money Move: Ignore the old argument that says you shouldn't prepay because you lose the tax deduction on the interest you pay. Let's say you don't prepay and spend $1,000 on interest. Sure, that $1,000 gives you a $280 tax deduction (if you're in the 28% tax bracket)…but you still spent another $720 on interest you could have saved by prepaying!

4. Clean out your wallet. Americans have gone credit crazy! Most people today have an average of 14 credit cards. You really need only two or three, so apply scissors liberally. (Click here to learn the right way to cancel your credit cards.)

Dolans Smart Money Move: Which cards should go first? Say goodbye to your department store cards. They usually charge outrageous interest rates—and almost any store today will accept MasterCard and Visa. Granted, sometimes the stores tempt you by offering all you can buy at 15% off on the day you start credit with them. If you're really a smart shopper, you'll do this only if you can pay off the debt at the end of the month.

One gasoline card (for emergencies) and one or two major credit cards plus an American Express card are more than enough. If you're part of a couple, the two of you should have just three or four cards between you: one Visa, one MasterCard, one AmEx, maybe one extra in your own name. What else do you need? (Check out Dolan Do's for Choosing the Right Credit Card.)

If you are overspending the limits on those three cards, you're probably headed for trouble if you aren't already there. Always think about how much the monthly payment adds up to over a couple of decades. What if that money was going into your retirement account instead of the credit card company's profit account?

5. Ditch your gold and platinum cards. The fees on these cards are outrageous. Unless you absolutely rely on the extra perks that come along with these cards, cut them up and pocket the $100–$200 (or more) you save in annual fees—or use it to pay off other debts.

6. Don't pay an annual fee. Cards with annual fees are a prime candidate for the chop block. Listen carefully—you don't have to pay an annual fee. No ifs, ands, or buts about it. Just call your credit card company today and ask them to eliminate your annual fee. Competition among credit cards is stiff; your company won't be willing to lose your business over $20 or $40 (which is small change to them). You can fatten your wallet easily—simply pick up the phone and ask. Isn't saving an extra 40 bucks every year worth a painless two-minute phone call?

7. You can also use this technique to lower your interest rate. Tell your credit card company that you've just received a credit card offer from another company offering a lower interest rate. Ask, "Can you match a 14% (or whatever lower rate you may find available elsewhere) rate?" If they can't, take your business elsewhere. (See How to Save Hundreds on Your Credit Card Interest.)

Dolan Smart Money Move: Although rates have crept up recently, this is historically an excellent time to comparison-shop for the lowest interest rates on credit cards. We have close to the lowest lending rates since the 1960s, but will it surprise you to hear that many of the same banks that are paying only 2% interest on your savings account are still charging you interest rates as high as 21% on your credit cards?

Consumer credit is a great deal (for them!). Don't let them get away with that! You can slash your payments dramatically by getting credit cards with lower interest rates.

Follow these steps and you'll be well on your way to climbing out of debt. And don't forget to read Debt Clinic Part II to make sure you're fully armed in the fight against debt.