Although a debt settlement company may be able to settle one or more of your debts, these programs can be very risky and have serious negative financial consequences for consumers. Additionally, some debt settlement companies deceive consumers by making promises they do not keep and engaging in other illegal conduct (like charging fees before obtaining any settlements, in violation of the TSR). For information, read Coping with Debt and Settling Credit Card Debts.
Some people take out home equity loans to get the money to pay off various debts. That can be effective if the home equity loan features a lower interest rate. This can be a powerful strategy, as it tends to feature lower interest rates and often-deductible interest, but  it does reduce your home equity and put your home at risk, so don't do it unless you will have the discipline to pay off the home equity loan. If you use the money to pay off credit card debt but then proceed to rack up more credit card debt, it may not have been worth it.
Learning how to get out of debt can be time-consuming, but it doesn’t have to be difficult if you do it the right way. It can take a lot of careful budget planning, self-discipline and be making conscious financial sacrifices, but the reward is more than worth it. While being able to pay off all your debts doesn’t usually happen overnight, there are efficient “get out of debt” plans and strategies to make you debt-free. Use the above effective expert tips to get out of debt fast.

I LOVE LOVE LOVE this article – I’m planning to share it with my husband tonight. Your approach and honestly in the article is so freshing since I myself was in a crazy amount of debt as of last year ($22K at the peak). Essentially, I followed all the steps you mentioned (took a hard look at my total debt, got a higher ($7K more) paying job, transferred balances to a 0% card and paid off a load of consumer debt. I’m scheduled to pay off all my consumer debt by April 2011.
Our credit was pretty good, around 700-730 but we were in a never ending circle or debt, with high interest rates we never saw an end in sight. We’ve been making payment now for about 3 months (it takes awhile for your creditors to accept a negotiated rate/payment from CareOne) and now we feel so much more comfortable. We now have thousands of dollars in savings, lots of money in our checking, and most importantly we are finally putting a dent in our debt because it dropped our interest rates so much- some to 2%.
We typically recommend fixing the rate as much as possible, unless you know that you can pay off your debt during a short time period. If you think it will take you 20 years to pay off your loan, you don’t want to bet on the next 20 years of interest rates. But, if you think you will pay it off in five years, you may want to take the bet. Some providers with variable rates will cap them, which can help temper some of the risk.
They also have a wider range of customer-friendly features than the average debt management company. These include a clear, intuitively designed website, online chat, Saturday credit counseling hours, and dozens of branches nationwide for those who want to do business face to face. Fees range from $0 to $50 for setup, and $0 to $75 monthly, depending on your state.
Negotiate credit card debt as well as outstanding loans - While it is possible to contact a credit card card company and negotiate yourself, unfortunately getting the best deal you want or that you may need won't necessarily be easy, if it can be done at all. If you do try to negotiate yourself rather than using a professional counselor, find a do it yourself approach to negotiate and get out of debt.

The most important first step to getting out of debt is to create a budget and take a hard look at your spending. This can be eye-opening for people who have never tracked their expenses. You have to get serious about reducing or eliminating certain unnecessary expenses. Be prepared to make sacrifices. This might mean a zero-dollar budget for things like date nights and new gadgets. Steer clear of temptations as much as possible, which might involve avoiding the mall or unsubscribing to emails from your favorite online retailer.
Making extra payments should allow more money to come off the principal -- so next month, you'd pay interest on a smaller principal balance and your interest cost would be lower. That's why paying extra can be so helpful in becoming debt free. Not only do you reduce the remaining balance owed, but you also reduce the interest cost that causes your balance to grow. 
Also known as a DMP, a debt management plan is a debt-relief option offered through a debt counseling agency or debt management company. These companies typically are members of organizations such as the National Foundation for Credit Counseling and the Association of Independent Consumer Credit Counseling Agencies. They work with your creditors to come up with a monthly payment solution that works for your situation.
Getting out of debt goes beyond making monthly payments, it takes discipline and self-control to avoid taking on new debt. Stop using a credit card to fund your lifestyle. Make a conscious decision to stop borrowing money, whether it be from a credit line or credit cards. By putting a stop to borrowing money you don’t have, you can focus solely on your existing debt and avoid any new debt from forming.
Refinance your car loan - Many people do not know that they can refinance their existing car loan, and there is usually not a fee involved. With today’s historically low interest rates, even on automobile loans, individuals can potentially save thousands of dollars in interest. It is free to submit an application for this service. Learn how to refinance your car loan.
Everyone I've talked to has been professional and courteous. They have truly helped to alleviate some of the stress of feeling like you are drowning with nowhere to turn. There didn't seem to be any daylight at the end of the debt tunnel until I spoke with the folks at National Debt Relief. Everyone is very helpful and the explanations of the process have been very thorough. I feel confident that with their assistance this program can work and I can get out of debt within a reasonable amount of time and save money in the process.
American Consumer Credit Counseling (ACCC) is a non profit credit counseling agency offering services such as debt advice, debt consolidation programs, and consumer bankruptcy counseling. We have provided thousands of families with financial counseling and helped them with consolidating bills and paying off credit cards. For consumers in need of bankruptcy counseling, ACCC is approved by the Department of Justice to provide both pre bankruptcy credit counseling and post-bankruptcy debtor education.

For most people who are struggling with debt, non-profit credit counseling is the better option. You pay  fewer out-of-pocket costs, which can be helpful. That last thing you need as you get out of debt is a big bill. If you’re looking for non-profit counseling services, fill out the form at the top of this page. Debt.com only refers you to the best accredited non-profit consumer credit counseling services.
Credit counseling organizations are usually non-profit organizations. Typically, their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your financial situation with you and help you develop a personalized plan to solve your money problems.  Here are some examples of what credit counselors might do: 
i now have my creditors ringing my phone Non-Stop everything’s gone into collections. I started with a 780 credit score I now have a 403 credit score. I was recently laid off from my job and in my line of business I have to have good credit so I can’t get another job. I manage Apartments andI was living onsite I have to move but I can’t get an apartment because my credit so low and when I call them to see what they are going to do I’m being talked to like I’m a piece of garbage.

The Federal Reserve says that the average household debt is up to $132,529 (including mortgages) a jump of 11% in the past decade. Credit card debt and auto loans are climbing over the $1 trillion mark. Student-loan debt has hit a staggering $1.3 trillion with 44.7 million borrowers, who owe an average of $37,172. That figure alone is up 186% in the past decade!
To get out of debt using the ladder method, start by attacking the balance on the account that charges the highest interest rate, McClary says. While you’re ramping up payments on that account, you make minimum payments on the others. When your highest-interest balance is gone, you move down a rung of the ladder and apply all your extra payments to the account with the next highest rate. You repeat the process until all your debt is eliminated.
This year, my husband and I made a few changes… we put ourselves on a strict budget and gave ourselves a cash allowance so we wouldn’t even be tempted to use the debit cards “just to grab lunch,” squirreled our credit cards away so we wouldn’t use them, and went through TONS of stuff that we weren’t using anymore and are planning a neighborhood yard sale for the spring.

Financial education. You'll have access to a wide variety of educational resources for help getting out of debt. These include newsletters, articles and tools on our website that can help you manage credit card debt, budget your finances more effectively, learn about how to stay out of debt, and get answers to questions like "How can I improve my credit score?" and "What is debt consolidation?"
The services provided by credit counseling services are nothing consumers can't do by themselves. "You could do it, but it's an involved process," says Kyle Winkfield, partner with financial firm O'Dell, Winkfield, Roseman and Shipp in the District of Columbia. The benefit of using an agency is that they have experience in negotiating debt payments and disputing incorrect information on credit reports. Paying an expert to do these tasks not only saves a person time, but can minimize the stress of having to navigate unfamiliar territory. "If you find a good one, they are worth more than they charge," Winkfield says.

How often interest compounds. Compounding occurs when interest is charged and added onto the principal balance. If interest compounds daily, interest is charged every day and added to your principal balance. So, the next day, interest is charged on principal balance that's slightly higher. The more often your interest compounds, the higher your actual interest costs are. If you borrowed $100 at 10% interest and interest compounded daily, you wouldn't owe just owe $110 at the end of the year if you never made a payment. Each day, you'd owe 1/365 of the 10% annual interest. Your daily interest cost would be added to your balance, so you'd be charged daily interest on a slightly higher balance every day. At the end of the year, you'd owe $110.52. 

The good news is that, by choosing a nonprofit credit counseling agency, you can end up with an affordable option that will leave you better off. Despite the monthly fees these plans charge, debt management can help you save thousands of dollars through reduced interest rates and creditor concessions. Plus, you get valuable advice and financial guidance all along the way when you choose to work with a nonprofit credit counseling agency versus a for-profit agency who is “not directed to provide coaching or advice,” said McClary.
Debt forgiveness is another potential strategy for anyone ready to admit "I need help with my debt." This involves paying your creditors a lump sum payment that is less than what you owe and ask them to wipe out your debt. While this is sometimes effective, it can also backfire and add even more debt to your totals. While ACCC does not get involved in debt forgiveness plans, we can help you understand the benefits or potential risks this approach may pose.
Customer reviewers are mainly impressed with National Debt Relief’s quality customer service, which most report is helpful and patient, considering the situation. At least one customer was even able to start repairing their credit score. Negative reviews tend to have less to do with the drawbacks of National Debt Relief than debt settlement itself.
While some private companies offer this service to borrowers, many lawyers and debt settlement attorneys may also be able to help you through this process. They help borrowers reduce or eliminate their debts and will work directly with your creditors, including banks. Many of these attorneys work on a contingency basis, meaning you need to pay them only if they are successful and save you money. Learn more about attorneys that settle debts.
The other method is called laddering, which is Clark’s preferred method because it will save you the most money over time. The way it works is you list your debts, starting with the highest interest rate card first and end with the debt with the lowest interest rate. This method makes the most mathematical sense, because you will save the most money in interest over time.  Regardless of which process you choose, the key is to stick with it.

What Does It Cost? First of all, there are no upfront fees and second, we only get paid when your debt is reduced. We only get paid for delivering results. Having said that, the fee varies by debt amount and the state you live, it ranges from 18-25% of the total debt enrolled. You can compare this to the 15-29% average interest charges you pay every year to your credit card companies and see our option can be an affordable option.

Peer to peer lending low interest loans can be helpful in some cases. This is a fairly new business, but a number of peer to peer lending sites may offer help, such as Prosper, Lending Club, and Zopa. The money can often be used for paying any number of bills or handle various forms of arrears. These companies and their services can help you reduce, consolidate and pay off credit cards, automobile loans, medical bills, and other higher interest rate loans. While they do often have minimum credit scores needed (especially when consolidating debt) They can be an option. More on peer to peer loans.


Settling your debts used to be a less than reputable practice but has recently gained prominence. It is basically where you hire a debt relief company to negotiate with the creditors on your behalf. The goal is to get them to agree to settlements where you make lump sum payments for a portion of your debts (this should much less than your total balances). In return the creditor agrees to forgive the rest of the debts.
You can find a state-by-state list of government-approved organizations at the U.S. Trustee Program, the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees. Also, before you file a Chapter 7 bankruptcy case, you must satisfy a "means test." This test requires you to confirm that your income does not exceed a certain amount. The amount varies by state and is publicized by the U.S. Trustee Program.
When you start a debt management program, you’re adjusting the payment schedule for your credit cards. So it’s important to note that your creditors may report that you’ve missed a payment on your credit reports in the first month your plan starts. Basically, this happens because there can be a gap between when a payment was supposed to be made on your previous payment schedule and the payments you’re making now.
Pros: National Debt Relief is one of the most affordable debt relief programs. It has a plethora of options to choose from, depending on your debt. National Debt Relief also is offered in 34 states, which is more than most debt relief programs. National Debt Relief also has one of the best reputations in the debt relief world. And the obvious pro, National Debt Relief can help you pay down your mountain of debt.

credit counseling agency for a consultation doesn’t impact your credit at all since the fact that you’ve sought help is not reported to the credit reporting agency. If you enroll you in a Debt Management Plan, where you make one monthly payment to the counseling agency and it disburses payments to your creditors, however, it can affect your credit in several ways.
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When it comes to paying off credit card debt, many consumers take the path of least resistance: the so-called "minimum payment plan." By law, credit card issuers are required to set a minimum monthly payment amount for each cardholder. These payments are calculated on the basis of the cardholder's total balance, interest rate and certain other factors.


Even outside of the holidays, plenty of seasonal jobs may be available. Springtime brings the need for seasonal greenhouse workers and farm jobs, while summer calls for tour operators and all types of outdoor, temporary workers from lifeguards to landscapers. Fall brings seasonal work for haunted house attractions, pumpkin patches, and fall harvest.


Things to mention to get them on your side? Let them know how long you’ve been a loyal customer and that you would love to stick around. But, also share that other credit card companies are offering you lower rates, even 0% introductory rates for balance transfers, and that you can’t ignore the interest savings. Usually, they swing into customer retention mode, and they may be able to pull some strings.
I am in my mid 50’s and am considering early retirement. It is very rewarding to be debt free. There were a couple rules I lived by. I would not charge something that would be gone before I got the bill. Such as meals, drinks, vacations, If I could not pay cash I waited until I could. I still refuse to to pay interest on anything that depreciates. Which is almost everything except a house. Why pay more (interest) for something that is going to be worth less? I am very fortunate that I have been able to pay off my home, have zero debt, and have enough in investments and savings that I will be able to retire about 10 years early. Keep up the work, it does pay off in the long run.
Why don’t you qualify for IBR or PAYE? Is it because your income is too high to reduce your payments? If that’s the case, and you’ve exhausted all your options, then I am at a loss in terms of what to suggest other than to encourage you to continue to pay as much as you can and check back into those programs from time to time to see if requirements have changed. Student loan debt is an enormous problem and for many there is no simple solution.
I have my creditors calling me 30 times a day threatening me. And every single one of them told me that it never heard from Clear one advantage when I emailed clear one Advantage for documentation of each time they contacted my creditors, that their website it says “In Negotiations” they have to have some kind of documentation of each time that they called or emailed or mailed something to my creditors and I wanted copies. I received an email back from them saying they didn’t have any documentation.

It depends on how much debt you have and how successful National Debt Relief is in negotiating with your creditors. However, there are quite a few examples of how much past customers have saved in reviews on the Better Business Bureau (BBB) website. One customer claimed enrolling in the program helped them cut down their payments by almost 70%, while another said they were able to shave two years and $3,000 off their debt repayments.
The Federal Reserve says that the average household debt is up to $132,529 (including mortgages) a jump of 11% in the past decade. Credit card debt and auto loans are climbing over the $1 trillion mark. Student-loan debt has hit a staggering $1.3 trillion with 44.7 million borrowers, who owe an average of $37,172. That figure alone is up 186% in the past decade!
Free advice from credit counseling agencies is available. Several different organizations, all of which are non-profits, operate across the country. A number of agencies operate regionally as well. They provide a number of low cost or free debt reduction programs, offer ways to improve credit scores, can advise on filing for bankruptcy, offer budgeting services, and in general provide information on ways to gain control of your bills. Find a listing of non-profit credit counseling agencies.
Avoid outrageous upfront fees. A small initial fee (up to $50 or, in rare cases, as much as $100 if you have a lot of debt or high income) is normal, but large upfront fees are out of line. If any agency asks for a fee (or donation) make sure that you know what it will cover, and get it in writing. Find out if you'll have to pay any additional fees to start the program. Don't get tricked into paying one "consultation fee," and then an "application fee" or "an enrollment fee." If you're truly unable to pay, look for an agency that is willing to waive the fee or spread it out (without charging additional fees for doing so).
This is the last-ditch solution if your financial situation has become so overwhelming that there doesn’t appear to be a way out. Bankruptcy offers a “fresh start” though with lots of restrictive conditions. You can file for either a Chapter 7 bankruptcy, which cancels your debts, or a Chapter 13 bankruptcy, which sets up a 3-5 year repayment plan to eliminate your debts.
Credit Score Issues: One thing is certain: your credit score will be damaged. The lender, collector or credit-card company will report the debt as “settled for less than agreed’’ or “settlement accepted’’ for seven years. Also, even though you are dealing with the debt-settlement company for payments, the lenders will report late-payment status updates to the credit bureaus. That could be the case until the account is actually settled.

Credit counseling provides guidance and support on consumer credit, money and debt management, and budgeting. The objective of most credit counseling is to help a debtor avoid bankruptcy and to provide primary financial education on managing money. Borrowers with an understanding of money management are assets for lenders as well. Many counseling services also negotiate with creditors on behalf of the borrower to reduce interest rates and late fees.

If you need help getting out of debt, American Consumer Credit Counseling offers debt management services that can help you find your way out of debt – usually within five years. As a non-profit organization, our professional credit counselors are experts at delivering solutions for individuals and families who need help getting out of debt. Since our founding in 1991, we've helped tens of thousands of people, showing them how to pay off debts, reduce credit card debt and live life debt-free. With the lowest rate structure of any debt management program, our services are affordable and convenient. If you're ready to seek help getting out of debt, contact us today to set an appointment for a free consultation.
If you cash in your IRA early, you will not only pay taxes on it (unless it is a ROTH), you also pay a 10% early withdrawal penalty. That means that money is not going to go very far. Before you use your retirement money to pay off consumer debt, I would suggest you at least talk with a reputable credit counseling agency to see if there’s a way to get out of debt without using this money that you will no doubt need when you do retire.
The big advantage of the debt snowball is scoring quick wins. Science backs up the idea that this is the best approach, because you'll stay more motivated as you see debt balances paid off. But there's an obvious downside: Your smallest debt may not have the highest interest rate. If you're waiting longer to pay off high-interest debt while focusing on lower-rate debts, you'll pay more interest over time.  

If your finances have taken a turn for the worse and you find yourself drowning in debt, a debt management program may help you keep your head above water. These programs, also known as debt management plans or DMPs, are a form of debt relief in which a counseling agency works with your creditors to reduce your monthly payment to a level more suitable to your current situation.[1] A DMP may be able to help you negotiate lower interest rates, get late fees waived, work out a payment schedule that's acceptable to you and your creditors, and consolidate your monthly payments into one. However, keep in mind that all DMPs charge fees, and some can be excessively expensive or even fraudulent.
In order to qualify for either type of these bankruptcies you will need to show proof that you are simply unable to repay your debts. You will be required to get credit counseling from an agency that has been approved by the U.S. Trustee’s office and this must be within 180 days before you file for bankruptcy. When you complete your counseling the credit-counseling agency will provide you with a certificate of completion and you must file this no later than 15 days after the date of your bankruptcy filing. If you have worked out a repayment plan with the agency you will also be given a copy of it.
Debt settlement companies also charge a fee for their "service." Most of the time, settlement fees cost between $1,500 to $3,500. Fraudulent debt settlement companies often tell customers to stop making payments on their debts and instead pay the company. Once their fee is accounted for, they promise to negotiate with your creditors and settle your debts. Sounds great, right? Well, the debt settlement companies usually don’t deliver on helping you with your debt after they take your money. They’ll leave you on the hook for late fees and additional interest payments on debt they promised to help you pay!
Personal loans. Personal loans are another solution to refinance debt. You can take out a personal loan to repay credit card debt, medical debt, payday loans, or other types of high-interest debt. Many personal lenders do forbid you from using the proceeds of your loan to repay student debt, but otherwise you have almost endless flexibility in what you can use the borrowed money for. 

The most important message is to DO SOMETHING. I would encourage folks to do the reverse of taking on the larger balances first and paying more on them. Pick a smaller balance, high interest card and pay it off. This gives motivation to get the next one up the ladder in your payoff plans. For the sake of your credit score, remember length of history and pay history go together to determine your score so closing that account may actually lower your score over time. If you cannot trust yourself not to use it, close it anyway.
If you have poor credit/no credit, unfortunately you won’t likely be able to qualify for many of these other options. However, there are a number of companies that specialize in helping people exactly like you. These companies are called “Debt Relief” services and are for those with over $7,500 in credit cards, medical bills, taxes, and other unsecured debts and poor/no credit. 
Why don’t you qualify for IBR or PAYE? Is it because your income is too high to reduce your payments? If that’s the case, and you’ve exhausted all your options, then I am at a loss in terms of what to suggest other than to encourage you to continue to pay as much as you can and check back into those programs from time to time to see if requirements have changed. Student loan debt is an enormous problem and for many there is no simple solution.
Under the provisions of the Servicemembers Civil Relief Act (SCRA), you may qualify for a reduced interest rate on mortgage payments or credit card debt, protection from eviction, or a delay of all civil court actions, such as bankruptcy, foreclosure, or divorce proceedings. To find out if you qualify, contact your local Armed Forces Legal Assistance office.
ClearPoint Credit Counseling has been in business for 50 years, and their wide range of educational offerings includes “ClearPoint U,” a series of free, on-demand online courses on personal finance topics. The company has 50 branches across the U.S. and is accredited by the BBB, NFCC, and COA. Their website is polished and easy to navigate, but is a bit less transparent about fees and potential reductions in interest rates than their competitors.

I don’t know where to begin. as of 2 days ago I had about 1800$ coming back to me after the final settlement. I call to verify and close account and 2 days later I see totally different numbers in my account. the balance I had is gone. Its like my account was rewritten to hide the excess. I know what I saw 2 days ago. Something is off and after I added up what I paid and what they settled my accounts for there is a lot of money missing in general. almost 4000$ what did I pay out in hidden fees!!?? If you are considering using this company think again PLEASE.

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Man, I’m in trouble! Just calculated my DTI ratio and it’s not pretty! A year ago I started taking charge of my credit problem and decided to do a debt consolidation. The problem is, now that I had this loan in the exact amount of what I owed in credit card and line of credit I figured I would pay most of it and then keep a little money to get stuff I needed (a new mattress and some furniture). Stupidest move I ever did! Now, a year later, I’ve maxed out my credit card once again (I should have lowered the limit after I had paid it off a year prior…..but I thought I was good), I still owe over $5000 on my line of credit and now, I also have to pay that consolidation loan! Within a year, my debt amount went from $14,500 to $33,500! And the worst part? I don’t even know how I managed that! I don’t think I spend a lot of money on trivial things………but clearly I’m spending somewhere. So according to your calculator, I’m at a 0.62 DTI ratio. I mean I make over 50K a year, if I cut down on…..everything, I should be able to pay this off. My car loan is at 0% interest so I’m not too concern with that one. I do put money away every month in an RRSP (it’s the Canadian equivalent of a 401(K)) which cuts down my income tax payment at the end of the year. I’m also a federal employee so I have a pension plan at work with a lot of good benefits so I’m set on the pension plan side. But I can’t manage to save enough money to cover even one month of my income. I mean I’ll be 30 in 3 months and I’ve always been a pretty smart girl……..but I can’t get a hold on my finances! Anyway, I’ve been going through your site and checking out all your tools. It’s giving me a hope.
2 years ago my husband & I cut up all of our credit cards and contacted each Credit Card company to come up with a reasonable monthly pay plan and close out the account. We have been doing this fine ever since as it comes directly out of our checking account. However, we have recently come into enough money to settle all of our debt for probably 50%-75% of the amount originally owed. Because we are already in “payment mode” with these companies, it cannot hurt our credit anymore to go with a settlement offer, correct? Our goal is to pay off as many as possible with the money we have.

Debt Settlement is making a deal with creditors to pay less than the total balance owed. As attractive as that sounds, there are some severe penalties, notably to your credit score and tax liabilities. Debt settlement costs include attorney fees (typically 10-20% of amount settled) and taxes owed on forgiven debt. Debt settlement negatively impacts credit for several years.
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