Debt consolidation tips

Personal debt is near an all time high, with the average American burdened with $9200 in credit card debt, in addition to other types of debt like student loans, car loans, and mortgages. 29% of all people with debt say that medical expenses contributed to their debt.

Senior citizens, especially widows with little financial experience, have an average debt of $5800 because their expenses exceed their income from social security and pensions.
If your debt has grown to an unmanageable level, you are not alone. Many people feel the daily stress of debt, but debt relief options have helped millions of them get out of debt. Start out with the basics, including how much you owe, what you can pay and what your financial priorities are... and then explore the five most common strategies for getting debt free.

Common Debt Relief Options
You can take control of your situation and get out of debt with one or more of these five options:
* Credit counseling

* Debt consolidation

* Debt settlement

* Self-help

* Bankruptcy
Bills.com has created individual solution pages within the debt portal, or get a quick debt relief solution overview below.

Credit Counseling
Credit counseling is a program that enrolls you on a debt management plan ("DMP") which usually allows you to qualify for a concession rate from your creditors for lower interest rates and lower payments. The plan should include reduced interest rates, lessons in budgeting and money management, or a comprehensive debt management program.
Some credit counselors can help you repay your debts, but be wary of credit counselors who:
Ask you to pay a high up-front fee

Require you to sign up before the consultation

Offer a plan without assessing your situation

Don't teach budgeting or money management skills

Before you sign, check the Better Business Bureau for complaints.

Debt Consolidation
You may be able to consolidate your debts with a home equity loan or other debt consolidation loan. If you're confident that you'll be able to make the payments without building more credit card debt, debt consolidation can be an excellent way to reduce your payments and possibly reduce your taxes. You must be a homeowner to qualify for most debt consolidation loans. You can apply with Bills.com's approved debt consolidation lenders here: Debt Relief Quote.

Debt Negotiation or Debt Settlement
Debt settlement services offer to negotiate and settle your debts for less than you owe, many times reducing debts by as much as half. Debt settlement is an option for people who cannot afford their monthly payments, and who are not worried if their credit rating will be negatively impacted during the program. It's important to be aware that you are NOT making monthly payments and staying current on your debts while enrolled in a debt settlement program, so be aware of the credit impact and the potential collection harassment from your creditors.

Self-Help Debt Relief
The easiest debt relief options are things you can do yourself, like:
1. Track your spending - Write down every penny you spend for one month, including monthly bills, automatic payments and bank charges. If you see a lot of unnecessary expenses like $10 weekday lunches or $4 magazines bought at a newsstand, cut those expenses and use the savings to pay down your debts.

2. Check your credit reports - The government provides three free reports a year at www.annualcreditreport.com and 4 out of 5 people's reports have errors that can increase your interest rate or damage your credit.

3. Negotiate with creditors - Call your creditors and ask them to reduce your interest rate in order to keep you as a customer. If you know a payment will be late or you can't pay it, call the creditor before the due date to arrange a new payment plan.

Bankruptcy
Bankruptcy should be your last choice for getting out of debt because it will damage your credit for 7-10 years and, depending on which type of bankruptcy you file for, you could be forced to give up some of your assets or assigned a long-term payment plan. There have also been legal changes put in place by congress that makes if more challenging to qualify for a Chapter 7 Bankruptcy, forcing many people to file for a Chapter 13 Bankruptcy which is really a repayment plan.
Debt can be stressful, but once you gain control over it, you'll sleep better at night. Debt relief options like free online budgeting and debt management tools or professional credit and debt services can help you become free of bad debt and start planning for your future again.