Getting out of debt can be tough when you don’t have a good financial background to start from.  In fact this is what hinders most people from successfully getting out of debt.  So in this article I’m going to cover a few options and give you some of the good points along with the bad to help you make a better decision.

Debt Negotiation

The first option to consider is debt negotiation.  This is where you work with a third party company who negotiates your debts on your behalf.  In some case they will be able to cut up to half of the total amount of debt that you owe getting you out of debt in usually up to 3 to 4 years.

However these programs do have a few down sides.  First, they will charge anywhere around 17% of the total amount of debt placed in the program.  On top of that they only accept usually $10,000 of unsecured debt or more into the program and finally, any debt that is negotiated in these plans may be taxed by the federal government.

Debt Consolidation

The next option is to consider debt consolidation.  This is the process of combining all of your debts into one larger debt.  Typically what happens is most people combine their smaller debts such as credit cards debt with a larger debt such as their home mortgage because it gives some special tax privileges and a lower fixed interest rate instead of a higher variable rate.

On the down side these programs don’t necessarily eliminate anymore debt for you.  On top of that once all of your debt is paid off it could be possible to fall back into debt even further if you would happen to reload you credit cards full of debt again.  To avoid this you may want to consider canceling all credits to prevent this from happening to you.

Debt Snowball

The final option is to consider the debt snowball plan.  This plan works by aligning all of your debts from the lowest balance to highest balance.  You then start by paying all extra available cash towards the lowest balance debt and paying the minimum payment on all other debts.  You can do this program yourself or work with a company that helps you such as DebtGoal, or The John Cummuta Transforming Debt Into Wealth Program.

On the down side though this program will be managed by you entirely.   On top of that it’s up to you to make things happen, and if you don’t like the sound of paying off all of your debts yourself this may not be a program for you.

In The End…

As a final thought finding the best debt program relief is really up to you and what you think you can handle.  If you don’t feel you can handle the stress of paying your debts off yourself go with a debt negotiation plan.  However if you like to do things on your own consider the debt snowball plan as a way to debt relief.