So often, those burdened with too much debt feel that they have no way out. Out of desperation, they jump at the very first solution that comes their way.

Many Americans are drowing in debt. But there are several solutions that can help. The key is to step back and consider your options based on how much debt you have and your spending habits. Take your time in making a decisions, and you will make the right one. Rush in, and you will often find that you haven’t helped your situation at all.

The first option you have is self-help. Personally, I feel that this is something you have to do, even if you pick another option. You need to take control of your financial sitaution. Start doing this by assessing your income and expenses. Create a budget that shows exactly what you spend each month. Then start eliminating the non-essentials.

Look closely at your debt situation. You should list your debts from highest interest rate to lowest interest rate. Start calling your creditors and asking for a lower interest rate. I’ve done this without being in debt trouble and easily received a lower interest rate. Simply remind them that you are a good customer with good credit. If you have bad credit, this won’t work.

Now set up a plan to start paying these cards off. You may find that you were able to free up $150 out of your budget. Put this towards your highest interest rate debt. When it is paid off, move that $150 plus the amount you were paying for the first debt down to the second debt. It will be paid off all the faster. And just go down your list. Yes, it takes time and sacrifice. But it is worth it.

You should also put all of your extra money to paying off your debt. Bonuses, gifts, tax refunds — they all go to the debt. If you find that you are getting an amount close to the total of one of your debts, go ahead and pay it off and get it off the list, no matter where it is on the list. This simply feels good to pay something off and keeps you motivated.

Another option you have is debt consolidation. This is something you can either do on your own or with the help of a debt consolidation agency. Most debt consolidation is simply the use of a home equity line of credit or a second mortgage to pay your debt and lower your payment. You don’t need to pay a company to arrange this for you. You can do this on your own.

If you don’t own your own home or have very little credit, you might consider enrolling in a debt management plan through a reputable credit counseling agency. But you must be careful here. Check the agency out thoroughly with the Better Business Bureau and the state attorney general’s office. Make sure that they have been in business in your area for quite a while and are well-known. A good agency will never ask for money in advance and will be willing to lay out a plan with you before asking for a payment. They are handling the payment of your bills, you want to be sure that they are legit.

Your third option comes in play when nothing else really works for your situation. This is your final option and should be reserved as thus. Bankruptcy offers a fresh start to those in a bad debt situation, but it takes years to recover from. Bankruptcy can remain on your report for up to 10 years and makes it difficult to get credit, buy a home or even get affordable life and auto insurance.

New bankruptcy laws have made it harder to file for bankruptcy. If you pass the “means test,” you will have to file for Chapter 13 bankruptcy, where a trustee will set up a re-payment plan for your debts and you will be allowed to keep certain secured assets. Chapter 7 means that your assets will be liquidated and your debts will be discharged. The laws are fairly complicated, so it will do you good to have a good lawyer on your side.

Being in over your head in debt can make your options appear to disappear. But they are there. Consider them closely and make your choice based on your individual financial situation.

Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!