Eliminating Debt: Understanding Your Options

Eliminating debt is easier said than done, especially these days when it is nearly impossible to find someone with no debt at all. Although, there can be some who are able to live frugally, still everyone is vulnerable to having debts. If you are encountering some debt problems, here are few options that you may consider.

Debt Settlement – Filing for bankruptcy should be the least of your options in settling your debt. Instead of completely damaging your credit score through bankruptcy, choose to have debt settlement. This approach can be done by a legitimate debt settlement agency or by yourself. Debt settlement can be easy as long as you reach out to your creditors. Inform them by writing that you are currently experiencing hardship but you are willing to settle the balances.

If you think you are not a good negotiator then you may consider hiring a professional financial expert who can do the settlement for you.

Debt Consolidation – If you have multiple debts then consolidating them is a good way to eliminate the hassle of multiple payments each month. Through debt consolidation, you will have to transfer your balances to an account with the smallest interest fee. But be very careful because some card providers impose high charges on balance transfer, so double check which account is more practical to do the transfer.

The good thing about consolidation is that you will not have to confuse yourself about the numerous payment schedules. Through this option, you will have to make just one payment every month. Another way to do this is through debt consolidation loan wherein you file a loan from your chosen debt consolidation agency and then use the money to pay your debts. This means your obligation is to the agency and not to your creditors. However, not everyone can get this because your loan approval is influenced by your credit score.

Debt Management Program – If you can join in some free credit counseling programs in your area then by all means do it. Credit counseling will educate you on how to handle your finances and solve your debt dilemmas without filing for bankruptcy. Most of credit counseling services are non-profit so they free of charge. Although joining a debt management program comes with a monthly fee at least you will be guided with the appropriate payment schedule which if you follow can guarantee payment of your debt at the end of the program.

The monthly fee can be reduced or waived. You just have to ask the credit counselor if they do, otherwise you can get assistance from other credit counseling service providers. Eliminating debt is doable with the right method and attitude.


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