If you're carrying unsecured debts worth less than $10,000, you're in better financial condition than many of your peers. Of course, your debt-to-income ratio is important. If you don't make very much money or don't have a lot of disposable income, you're probably not comfortable with the idea of running any balances at all on your credit cards or personal lines of credit.
Before you do anything else, stop using your credit cards and personal lines of credit. This will arrest the growth of your debt balances and enable you to begin paying down your debts in a meaningful way. You can learn more about managing your expenses and using credit wisely in our budgeting tips section.
If you can keep your unsecured debt load under $10,000, you shouldn't need to file for bankruptcy. Bankruptcy is a last-ditch course of action that can damage your credit score for 10 years.
You also shouldn't need to take out a debt consolidation loan. These can be expensive and take years to pay off in full.
Likewise, you probably don't need to seek help from National Debt Relief's debt settlement team. Since debt settlement can negatively affect your credit score, most financial professionals don't recommend it for use on debt loads of less than $10,000.
However, there are two useful debt relief methods that you can use.
The first is a self-managed system of aggressive debt reduction known as the "debt snowball" method. It was first popularized by finance guru Dave Ramsey and is recommended by other financial professionals as well.
The second is a professionally-assisted form of debt relief known as credit counseling. Credit counseling organizations are typically not-for-profit entities that work closely with credit card issuers and other lenders to reduce their clients' debts.
Both methods have proven successful for borrowers carrying total unsecured debt loads worth $10,000 or less.