Debt Settlement Alternatives

Seeking debt settlement is a confusing process that often leaves a person feeling isolated and vulnerable. While there are ethical debt settlement companies to use, many companies in this field are looking to take advantage of people when they are in the greatest state of financial need. There are a few things you can do yourself to get out of debt and recover your financial health.

Payment Plans

The first option to consider is speaking with your lenders directly. Especially in times of a recessed economy, lenders understand circumstances like job loss or medical emergency may affect your ability to pay. Be professional and speak only about those issues that affect your ability to repay the loan on time. Once you have explained the situation, ask about affordable payment plans they may be able to offer.

Cable companies, utilities companies, auto lenders and even doctor's offices are willing to work with most borrowers to arrange payment plans. It is better they work with you to accomplish the payments then settle for less than they are owed or settle for nothing at all in a bankruptcy court. 

High Risk Personal Loan

A high risk personal loan is an unsecured loan from a direct lender. These lending companies tend to charge very high interest rates on the debt, which means this will be an expensive option. However, if you are serious about getting out of debt yourself, this option will help you rebuild your credit quickly. Using the loan to pay off existing debt, you will then only have one monthly payment. Always pay off the debt with the highest interest rates first. If you stick to a budget and make payments on time, you will typically pay off the loan rather quickly.

Secured Personal Loan

Interest rates on personal loans can decrease if you are willing to post collateral. Using an auto title or home deed to secure a personal loan will make the lender more likely to work with you and make the loan less expensive. Once you take out this loan, use it only to pay off existing debt. Stop all spending on credit cards until you have paid off the personal loan and recovered the asset you placed as collateral.


Many borrowers fear bankruptcy. The truth is: bankruptcy is often the best option for those who qualify. Qualifying for bankruptcy means you are in enough of a compromised financial state that the legal system is willing to step in and settle your debt. Once you enter bankruptcy, a financial burden will be lifted from you and placed on the court. Bankruptcy proceedings are lengthy and stressful, and they will leave a black mark on your credit score. However, thousands of people and companies use this provision each year to gain a clean slate and start from scratch in building financial stability.

Improve Your Credit Score - Free Consultation

Need debt consolidation relief? Click here!