In many countries, the only solution to deal with a smothering load of debt is to take extreme measures like bankruptcy. However, there are less extreme measures you can take that are not as harsh on your credit and still allow you to work yourself out of debt over a much shorter timeframe than you might otherwise be able to.
In the US, there are many firms that provide these types of debt services. The most basic is called debt counseling, where you meet with a debt counselor and work together to come up with a plan to pay your debts. The next, more intense type of debt service is to visit another type of debt company that works directly with your creditors to reduce the amount of debt you owe. These services go by many names but often use the terms debt negotiation, debt relief and debt settlement. In essence, the service charges you a fee to contact your creditors and negotiate your debt payments on your behalf. Sometimes they reduce the amount of your monthly payment, give you a more favorable rate, or even reduce the amount of debt you owe by writing off some of your debt. Of course any late payments and debt write-offs will still hurt your credit, but it is a reputable solution. If these aren’t enough, or you no longer have the means to pay back even a portion of your debts, then bankruptcy is the next step.
In other countries, they have different laws that often result in better results for those buried in debt. Some countries have laws that favor the consumers, and some have laws that favor the creditors. Which country you live in will go a long way in determining your best debt solution. For example, in Scotland there is a legal way to enter into a trust deed. A trust deed will protect you from your creditors as well as set an affordable payment plan that will pay off your debts over the next three years. Similar to debt negotiation services, these programs will also hurt your credit. However, they are sanctioned by the government and do not involve bankruptcy, or sequestration, as they call it in Scotland.
One final thing to note about lowering your debt burden is that it is always best if you can take care of your debts yourself. While many people fall into debt because of medical emergencies or unemployment, the majority of people with debt problems are self induced. If this describes you make sure that you get more than just financial help. You should also get some type of help or training with respect to managing your finances, or curing whatever spending issues you may have.