Are debt collectors harassing unmercifully? This can make you feel as if you were constantly being hit over the head with a ballpeen hammer. While you’d love to get your debts paid off you just don’t know what to do.
The good news and the bad news
When it comes to eliminating debt there is good news and bad news. The bad news is that there’s no way to eliminate it quickly short of filing for bankruptcy. And even that can take up to six months. The good news is that there are other options available that take longer but that won’t leave as bad a stain on your credit report as would a bankruptcy.
Debt counseling
One popular way to get out of debt is through consumer credit counseling. You could get the counseling through a local agency or if there is not one in your area, you can easily find one online. What’s important is to make sure that it’s a nonprofit and charges little or nothing for its services.
If you choose credit counseling, you will have a debt counselor who will first review your finances, help you create a budget and then contact your creditors. He or she will work with them to get your interest rates reduced and any penalties waived. Following this, the two of you will create a debt management plan (DMP) to pay off your debts. Your counselor will present this plan to your creditors for approval. If they do approve your plan, you will have consolidated your debts in that you will send just one payment a month to the credit-counseling agency. It will probably take you five years to complete your DMP, during which time you will have to be careful to not take on any new credit and will need to stay on a fairly stringent budget.
A debt consolidation loan
A debt consolidation loan is pretty much what its name suggests. It’s a loan you get to pay off your creditors and, thus, consolidate your debts. The advantages of a debt consolidation loan is that it should have a much lower interest rate than what you are paying on your current debts as well as a lower monthly payment. The biggest downside to one of these loans is that you will end up paying more in interest because it will have longer terms – that is it will take more time to pay back the money. For example, you might be able to get a second mortgage and use the money to pay off your creditors but it could take you as long as 15 years to pay off that new loan.
Transfer your balances
A third popular way to get debt under control is by transferring the balances on your current credit cards to one with a lower interest rate. If you’re typical, your debts probably have an average interest rate of 18% or more. If this is the case, you could transfer all these balances to a card with an interest rate of 12% or even lower. In fact, there are now available what’s called 0% balance transfer cards. If you can get one of these cards, you could transfer all your balances to it and be interest-free for six, 12 or even 18 months. The other advantage of this is that during those months where you are paying no interest, all of your payments would be used to reduce your balance. If you play your cards right, you could be totally debt free before that introductory period expires.
Settle your debts
Many people are not aware of this but it is possible to contact creditors and settle debts for less than what’s owed. The con or disadvantage of this is that you must be at least six months in arrears on your payments before most creditors will discuss settlement. But if this is the case, you might be able to settle your debts for less than what you owe. Of course, you would have to have the money available to pay off any settlements you are able to negotiate. It is for this reason that many people turn to debt settlement companies such as National Debt Relief to negotiate and settle their debts for them.
National Debt Relief helps resolve debt for people nationwide who owe $10k+ in unsecured debt. Our experts negotiate with creditors so that clients pay only a fraction of what they owe and can become debt free in as little as 24-48 months. 
