If your monthly debt payments, excluding mortgage or rent, exceed 20% of your income, your debts are a serious problem requiring action. Here are some basic alternatives for getting out of debt:

• Credit Counseling
• The Do It Yourself Approach
• Debt Management Program
• Debt Consolidation
• Bankruptcy
• Debt Elimination Program

Credit Counseling
After conducting your financial analysis and budget, your counselor might suggest that the do it yourself approach, which will include completing self-help educational programs on budgeting, money management, and credit. By going it alone, you may be negotiating with your creditors, paying off debts with the highest interest rates first, obtaining a second job and cutting up your credit cards. While this way is certainly very effective, it is important to note that this requires self-confidence and self-discipline to follow this approach and follow through to completion.

When negotiating with creditors, you will find that some are willing to negotiate lower payments or interest rates, or waive late charges and other fees, because they realize that it’s better to receive some of the money owed than none of it. But you will have to ask yourself if you have the ability and temperament to conduct difficult, time consuming negotiations alone.

Debt Consolidation
In a typical debt consolidation, you consolidate your existing debts and mortgage payment into one, larger mortgage payment, sometimes at a lower interest rate. You take out a loan, often using your home as collateral, the lender sends you a check and you pay off your creditors. But don’t fall behind–you could lose your home! People who chose debt consolidation are very likely to end up in 5-7 years again with high credit card balances with high interest rates.

If you have a habit of buying on credit and carrying large balances on your credit cards, debt consolidation won’t fix your underlying spending problem. Also, you remain solely responsible for paying your own bills and negotiating with creditors.

Bankruptcy
Filing for bankruptcy should only be considered as an absolute last resort. Bankruptcy is a court action that stops lawsuits and any other attempts by creditors or collection agencies to collect from you. However, it comes with a high cost–it generally stays on your credit report for a full 10 years, causing extreme difficulty in using credit to obtain cars, home or other loans and can even restrict you from certain types of employment. Bankruptcy should never be thought of as a “quick” or “free” way to get out of debt, as it can completely destroy your credit worthiness for a very long time.

Chapter 7 Bankruptcy discharges virtually all of your consumer debts but does not eliminate secured debt, so you could still lose your home if you fall behind in your mortgage payments. You also will be required to pay such debts as student loans, alimony, child support, income taxes, and legal fines.

Chapter 13 Bankruptcy is used in special situations, primarily to allow the filer to keep his/her home. A court-appointed trustee oversees a strict repayment plan to pay off your debts during a period of three to five years.

Although bankruptcy may fix your short-term problems, because it stays on your credit report for so long it should only be used in extreme situations. Many people who file bankruptcy make the mistake of doing so without fully exploring their options, and never realize they have other, more viable choices that will allow them to preserve their credit standing.

Debt Elimination Program
Over the past several years, Debt Relief Educational Services (DRES) has been servicing individuals who have unsecured debt (primarily credit card debt). DRES accomplishes this by providing powerful choices to our members. These choices provide them with the best alternative solution to bankruptcy, consolidation, and other remedies that have been proven to be detrimental to their financial situation. To date, DRES has helped thousands of people obtain significant debt relief and restore an incredible amount of freedom back in to their lives!The procedures that allow DRES to accomplish its objectives have been working successfully for over five years now.

The staff at DRES includes: Former bank compliance division experts and Resource and Financial Education Specialists who have personal experience in utilizing these procedures from start to finish. These procedures include consumer remedies based on 12 C.F.R. (Code of Federal Regulations), the Fair Credit Billing Act, which is taken from Title 15 of the U.S.C. (United States Code) and other applicable federal laws. Additionally, for people with credit concern issues, DRES provides an educational tutorial based on consumer protection laws as well as a partnership with the nations leading credit repair organization.

DRES takes a cutting edge approach into an industry which is greatly untapped. There are millions of Americans who suffer from having too much unhealthy debt in their lives. DRES offers an opportunity for people to recapture an enormous part of their personal and financial freedom by eliminating this condition.

Conclusion:
Know that you have options for getting out of debt, and explore them fully. The key is finding the right solution for you.

David Lorenson is a senior debt solutions consultant with Debt Relief Educational Services (DRES). DRES provides a program that is the #1 Alternative to Bankruptcy and Refinance. Learn how to reduce your credit card debt by 75% or more. This program eliminates credit card and unsecured personal loans legally, ethically and morally. See his website at http://www.4creditcardhelp.info. David is the author of many other related debt soluti