The key to solving your debt problem is understanding all of your options. After you are aware of all the options available, the next step is to choose which option best suits your financial and personal needs. Below is a list of the most popular options, and a summary of what you can expect. This will help you save time and money.

Debt Options centered around Debt Consolidation. Debt consolidation refers to the process of consolidating multiple loans into one loan. You are basically moving debt from one side to the other to get a better rate. This option reduces your monthly outgo. This option allows you to save money and pay off your debt quicker.

Debt Options centered around Debt Consultants – We don’t like the name “Debt Consults” for many reasons. First, anyone can be a “Debt Consultant” – essentially, any Joe Blow from the streets. Over three-dozen companies required only a high school diploma. The companies that required potential employees have degrees didn’t care about the major. I am pointing out that virtually all of these “Debt experts” don’t have any financial education certification, licensing, or training. The title sounds great, but don’t be fooled! There are better options for debt.

Debt Options centered around Debt Relief – While the term “Debt Relief” can refer to or allude a variety of things in the United States, debt relief is actually synonymous with filing bankruptcy. If you see a company offering debt relief or advertising it, you should be aware that they may be trying to get you into bankruptcy court.

Debt Options centered around Debt Cancellation: One thing I dislike about the debt industry’s ability to sensationalize or outright mislead people without any impunity. The debt industry (which includes debt collection and debt relief), is a rift with scams. Scammers are a common problem. The latest scammers include individuals, companies, and organizations. Yes, ministers claim that you can cancel your debt.

All of them claim that if they pay an upfront fee or make an offer, your debts will be forgiven. In reality, no such plan exists! If they are deliberately trying to go out of business, no company can cancel debts.

Debt Options centered around Debt Settlement – Debt settlement involves negotiating with creditors to get each one to agree to a lower payment than the full amount of the debt. This option has a drawback: creditors will not settle with consumers if their accounts are in good standing, or relatively good standing.

People who are debt settlement candidates are those who have fallen behind in their payments and don’t see any way to catch up. Creditors will be more inclined to negotiate a settlement if the payments have stopped.

Consumers have many options for debt settlement. You can also use debt settlement firms. Keep in mind that many of these companies will charge high up-front fees and won’t work on your account until they have paid all fees. You can cancel any agreement you signed with these companies if you change your mind.

This is a good way to go. Find a company that charges only after they have obtained settlements in writing. You can also confirm the agreements. These companies typically charge a percentage (around 20%) of the amount that the outstanding balance has been reduced.

You can also hire an attorney to help you negotiate settlements. Smart consumers who have the patience and negotiation skills to arrange their debt settlements can use the assistance of debt coaches or websites that offer advice on DIY debt settlement.