While many of us succeed in dealing responsibly with our debts, falling into unmanageable debt is an all too common occurrence for a lot of people.
Luckily, several professional debt-relief options are available to help you reduce or even get rid of your debt in a consistent and logical manner.
These services come with a price because they are complicated, and involve plenty of paperwork and terminology most of us are unfamiliar with in our daily lives.
Many debtors turn to financial professionals for help with debt -- from calling lenders for lower rates, refinancing a home or simply creating a strict budget and sticking to it.
While you can handle debt-relief solutions yourself, some options are often left to a professional.
Also known as debt negotiation or debt resolution, debt settlement involves you or a debt settlement company negotiating lump-sum settlements with your creditors.
The object is to decrease the principal you own while also eventually retiring the debt.
Debt consolidation means taking out a loan, which you use to consolidate and pay off all your other debts.
The object of debt consolidation is to reduce interest rates and combine all of your debts into one manageable, monthly payment.
Unsecured debts such as credit card bills, medical bills, student loans, department store cards and unsecured lines of credit can be handled through a debt management program (DMP).
The object is to reduce your monthly payments by getting a reprieve from interest rates, late fees or penalties from your creditors while promising to pay back the full principal over time.
If circumstances are especially dire, you can file for either a Chapter 7 bankruptcy, which cancels your debts, or a Chapter 13 bankruptcy, which sets up a years-long repayment plan.