Tara Porter

Debt can feel crushing. Overwhelming. And if you are in a place where you just can’t see an end in sight, it can feel hopeless. If you feel like there is no way for you to be able to pay off your debts, you might want to consider some debt relief plans.

Negotiate for Yourself

While there are various programs to help you get out of debt (which we will cover in a second), they do come with their share of consequences. If your debt could be paid off within five years, you may want to first start by trying to negotiate your debts yourself. You could contact the credit card companies directly and negotiate either a lower interest rate or work with them to establish a debt settlement plan.

Here are some tips for negotiating with creditors:

  • Bring up your consideration of Chapter 7 Bankruptcy right away. Understanding that this option is on the table for you might make them more willing to negotiate.
  • While negotiating, aim to get the amount down to 50% of your current balance. It might take a little back and forth (and you might want to start lower at 15-20%), but once negotiations are done, you want to be somewhere under 50%
  • Work with the creditor, not the debt collector. Debt collectors are third-party agencies whose only job is to get you to pay your debt. Creditors, on the other hand, have the ability to adjust interest rate and loan amounts.
  • Once you’ve settled on a plan, be sure to get it in writing from the creditor

Debt Consolidation

If you credit card is in good standing, you could also open a credit card with a 0% interest balance transfer. This could help you pay off the debt faster since you won’t be paying interest as well. However, this does take some restraint as it increases your overall credit limit. Try to avoid charging more when given that extra wiggle room.

You could also get a fixed-rate debt consolidation loan. This rolls all of your loans into one loan with a single interest rate. You’ll pay back this loan in installments over a designated period of time.

Debt Management Company

When using a debt management company, you go through a credit counseling agency. As you work with a debt management company, they will look over your budget and help you determine what amount you can reasonably afford to pay towards debt and then negotiate with credit card companies to pay that amount.

You will pay off your credit card debt in full through these agencies, often with interest lowered significantly. This can help you pay off your debts in 3-5 years.

The downside is that once your debt is paid off, you must close that account, which will hurt your credit score. You may also be restricted from opening any additional credit cards during this time period.


As a last resort, you could file for Chapter 7 Bankruptcy. This clears unsecured debt, unsecured loans, and medical bills. However, keep in mind that it does not clear taxes owed, student loan debt, and child support owed. It also costs money for legal fees and stays on your credit report for ten years, so it’s not necessarily a “get out of jail free” card.

The process of filing for bankruptcy can be lengthy (around 4-6 months). It includes some of the following steps: Meeting with a bankruptcy counselor - this must happen 180 days before filing Complete what is called a “means test” - this test helps determine whether or not you are eligible for Chapter 7 bankruptcy Attend the Meeting of Creditors - this is a meeting where you answer under oath questions regarding your debts Complete a Financial Management Course - this is a specific course that must be completed within 60 days of the Meeting of Creditors and you must file paperwork indicating that you completed the course.

At that point, you will receive your discharge, which means no creditors can continue to collect debts from you.


We understand that debt can feel pressing and overwhelming. As you consider which debt relief method to use, take into account how much money you can currently pay towards debt. If you can pay it off in less than five years, then negotiating with creditors yourself or utilizing a debt consolidation loan might be the wisest move. If, on the other hand, you feel that you cannot pay off your debt in five years, and/or if your total unsecured debt is over half of your gross annual income, then a debt management plan or bankruptcy might be the best choice. Before you take any step, be sure you understand fully what debt will be cleared and all negative consequences.



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