Having debt associated with your name can present many problems including stress, embarrassment and the inability to borrow at desirable rates. Debt is so stressful, in fact, that experts rank it above child birth when looking at the most stressful events one is likely to experience over a lifetime. Although there are some bright spots in the economy that suggest we may be headed for better times, there are still thousands of people and businesses in need of substantial financial assistance. Fortunately, there are a variety of debt relief options available today that can help you clear debt that has eroded away your feelings self worth and your financial freedom.

If you’re one of the many consumers looking to clear debts that have started to take over your life, then you’ll be happy to know that there are many workable programs available that can allow you to get on with your life. It should be mentioned that before making any binding decisions that could affect your finances, it’s a good idea to speak to a qualified financial professional such as a bankruptcy service company or even someone that specializes in debt management. Often times the right person can help to put things into perspective, allowing you to step back and make the most appropriate decision.

The following list represents some commonly available programs and strategies that can help you clear your debt –

Minimum Payments

While most people would never recommend paying just the minimum amount due on their bills, there is actually some benefit over simply ignoring the payments all together. The problem with paying just the minimum balance is that doing so can lead to a cycle of lifetime payments, since the interest rate on the money borrowed will continue to add to the principal. That being said, we do recommend paying the minimum balance in lieu of not paying anything at all, as not paying even the minimum can open you up to all sorts of late payment charges, harassing calls from creditors and adjustments to your Annual Percentage Rate (APR).

Of course, there are some downsides to paying just the minimum amount listed on your statements. For one, there is little room for error when paying just the minimum; a couple of late payments could have you seeing substantial late charges, an increase in your APR and a subsequent spike in your minimum payment. Another reason that paying the minimum isn’t necessarily a good idea is that it can give you a false sense of optimism, making you feel as though you can continue spending without consequence so long as you keep making that minimum payment. This can work for awhile, but almost always eventually results in a collection of minimum payment amounts that are impossible to repay.

Credit Counseling Services

Credit counseling agencies are non-profit groups that exist to help struggling borrowers get a handle on their payments. Under such an arrangement, a borrower pays the agency a flat fee that is in turn distributed to each of their creditors. These programs typically last between 4 to 7 years and can be a great tool for people that have the ability to make their payments, but that lack the initiative or ability to take care of multiple payments. Credit counseling can also allow borrowers to lower their interest rates, which can be an effective way for them to get out of debt without having to resort to the minimum payment option discussed above.

Debt Settlement

Dialing up the intensity a bit in terms of clear debt solutions, we come to the option of debt settlement, which is designed for people that can no longer make their minimum payments. This option is seen as aggressive by most standards, since it involves direct negotiation with creditors on behalf of the borrower. Under this program, a debt settlement company works for you to reduce your outstanding debt by up to 60%, thereby providing a total balance that is more manageable.

It’s important to note that the type of company you choose to work with is of utmost importance. You want to select a company that has a solid track record for providing quality service, as there are companies out there that don’t necessarily have your best interest at heart.

Personal Bankruptcy

Filing a bankruptcy claim is considered by many to be the most significant action one can take to get out from under the crushing weight of consumer debt. The process is significant both in terms of the benefits it can provide and the consequences that come along with it. Because claiming bankruptcy is such a serious matter, it’s reserved solely for borrowers that can’t repair their debt any other way. You also must qualify to file based on your detailed financial information, which must be supplied by you or by a bankruptcy service company.

For more information on how to claim bankruptcy, please take a moment to browse our site. We have put together a variety of informative articles that attempt to answer any question you might have regarding the process itself and what to expect from it. We even have articles explaining how to go bankrupt on your own – a process commonly referred to as self bankruptcy.