Nobody wants to be in debt, but many people find themselves there anyway. People develop gambling debts, business debts, credit card debt, tax debt, and other forms of debt. The best way of coming out of any form of debt is to get help from the various free debt help services available. Each has its own benefits in getting you out of debt faster.
Credit counselors work with you privately over the phone, through email or in person to develop a financial plan to get out of debt. They help you find areas of savings and recommend services like debt management plans or debt consolidation loans.
In debt management plans, you have to give them a monthly payment, which they use to pay your unsecured debts after negotiating lower rates and fees with your creditors. These plans can get you out of unsecured debt in less than five years, with only a minimal impact on your credit score. Debt consolidation loans are used to pay short-term debts with a home equity loan or personal loan. They lower your interest rates and monthly payments. The monthly payments are further reduced with longer terms for your loans. However, it is better to close paid-off accounts to minimize the affect on your credit score.
You can try to reduce your debt through agreements made by debt negotiation companies. Not all lenders may agree to reduce your loan amount, but many will if you declare bankruptcy. With reduced debts, you find it easier to pay them off. However, by using debt negotiation, this point remains in your credit history for seven years. You may be able to get credit within a couple of years, but it will be at subprime rates. This reduced rate also has to be declared as income in your federal and state taxes.
Whatever debt management option you choose, it is always better to research several companies before signing up. Make sure the rates and services are reasonable, and clear any doubts before signing up.