The Maze of Debt Relief Options

If you're living paycheck to paycheck, struggling each month to pay your bills, and feel like you're drowning in a sea of debt, perhaps it's time to examine your options for debt relief. So, you do a google search and are more confused than ever because of the various options available, each promising that their option is the best one for you. You try to do your due diligence but are just getting more and more frustrated and deeper in debt.

What is a consumer to do?

The best way, obviously, to get rid of debt is to attack the balance with the highest annual percentage rate first. When that one is paid off, move onto the debt with the next-highest interest rate. Always attack that high-interest debt first. On that debt, you want to double, triple, or even quadruple minimum payments. When you're done with that one, move on to the next one. But what if you're falling behind more every month, which is what the debt relief options are really designed for.

In this seven part series, I will attempt to shine a light of reason on the subject in hopes of providing you with the knowledge necessary to make an educated and informed decision, as well as give you the peace of mind that you desire to become proactive (finally) and take the action necessary to do something about your debt burden.

In part 1, I will briefly touch upon each option (there are really only five) and give more detailed descriptions in the following daily parts (2 through 6) wrapping it all up in the final part on day number 7.

Debt relief is possible, but it requires determination and research on your part. Once you feel comfortable and sign on with a program, stick with it. If you are using the services of another company to help you obtain debt relief, make sure you read the small print and check out their references. Ultimately, your credit standing is in your hands. Do not trust it to those who are not actively working on your behalf.

So what are the debt relief options available to consumers?

1. Declare bankruptcy. Not as easy as it used to be especially since the president signed into law legislation to toughen personal bankruptcy laws. Still, it is an option for some. Just remember: depending on which course of action you take, Chapter 7 or Chapter 13, it can have a lasting impact on your credit.

2. Credit Counseling Services. You know, those "non-profit" guys. Be careful as often all these companies do is get your interest rates reduced for a period of time, earn money off of your payments, and cause more damage your credit rating.

3. Get a consolidation loan. Watch out as this means borrowing from the equity you have in your house (secured credit) to pay off debt that is unsecured. Be sure of your future if you chose this option.

4. Debt settlement.With the services of a company who would arbitrate on your behalf, you can get real debt relief without the stigma of bankruptcy. Yes, your credit would take a bit of a hit but it isn't the same as bankruptcy.

5. Do Nothing. Sure, it is an appealing option for some. You just have to screen all of your phone calls and dodge the collectors. But you cannot run and you cannot hide. Better to choose one of the first four options than this one!

When you're drowning in credit card or other unsecured debts, these are really the only debt elimination methods to choose from. Of the five options outlined above (each has their own pro's and con's) there is only one viable option that gets you out of debt in the shortest amount of time, for the least amount of money spent and with minimal damage to your credit standing.

That option is Debt Settlement, or as it is also called Debt Negotiation.

This is the option where your total (unsecured) debt balance is negotiated with your creditors and a lump sum settlement is made. On average, the settlement is 40 - 60 percent of the balance owed, including any settlement fees. Program length is normally between 12 and 36 months and is the only option where your credit rating takes the least amount of damage.

Which is exactly what you want!

In part 2, we will examine what Debt Settlement is and why it is, hands down, the very best available option available to consumers.