5 solutions to consumer debt.

I often meet with consumers who are very confused about what to do about
their credit card debt. Usually these consumers have been snowballed with all types of information, both true and false. What I will attempt to do here is break down the 5 possible solutions to credit card debt in a clear way that most consumers can understand. The 5 possible solutions include the following:

1. Self Help - Consumers attempt to repay their creditors simply by managing their cash flow.

2. Debt Management Plans - A credit counseling agency negotiates with the client's creditors on the client's behalf to set up a plan for paying off the debts.

3. Debt Consolidation - This should only be considered by consumers who can consolidate their debt with a lower interest rate, and not take on any new debt. Be careful trying to consolidate unsecured debt with secured debt, many times this can be a mistake.

4. Debt Settlement - The process where a debt settlement company negotiates with a consumer's creditors in order that the creditors will accept reduced payment in lieu of full payment. I would not recommend working with a debt settlement group, but handle this individually for many reasons.

5. Bankruptcy -This should be the last alternative to dealing with being overextended with credit card debt.

I will go into greater detail with each of these solutions over the next few days in order to provide a deeper understanding of these different debt reduction strategies.