You can negotiate with creditors, possibly settling your debts prematurely for less than the balance on your loan.
There are times when bankruptcy is the right answer for struggling borrowers.
You have several options for reducing your debt burden.
You can enroll in a professional debt management plan, or consider rolling several of your debts into a new consolidation loan.
You are likely to be unable to acquire new loans, or at least unsecured loans, when you are in a debt management plan.
All of this is listed (sometimes multiple times) on your credit report, but your credit score should actually improve through your debt management plan.
By rolling over your existing loans into a brand new loan, you are likely to see a modest negative impact on your credit score, although it is possible your score can rise.
Credit scores favor longer-standing debts with longer, more consistent payment histories.
Replacing debts before the original contract would have called for is viewed negatively, and it can hurt your score.
This can be a positive, but restricting, debt relief option.
Debt consolidation is not a strategy for getting out of debt, but rather a means to either improve the terms of your loans or to extend your payment timeline and reduce your monthly payments.
However, your credit report and possibly your credit score react to each of these debt relief options, which you should certainly take into consideration when determining the right course of action.
You actually lose control over most – if not all – of your credit accounts when you enroll in a debt management plan.