A huge number of people today are having a hard time stretching their income just to keep up with their daily needs.  The solution that most people have found to be helpful is the borrowing of money.  Obtaining different loans and the use of credit cards have already become a common practice for a lot of people, and many are really thankful for their existence.  However, there are also individuals who got used to obtaining credit only to find out in the end that they anymore can’t get out of it.  This article will discuss a few of the effective ways on how you can reduce or eliminate your debts.

1.    Debt Management

This type of debt relief program can help reduce your debts tremendously through the efforts of a debt management company.  Such a company will come up with a repayment plan for all your debts and will submit them to your creditors.  Some are also successful in trying to waive off interests and charges.  With debt management, you will only have to pay a single account on a monthly basis, not directly to your creditors, but to the debt management company.  It assumes the responsibility of distributing your payments to your different creditors based on the amount agreed upon.

2.    Debt Consolidation

When you avail of debt consolidation from a debt consolidation provider that offers low rates, this will make a big difference on your current financial standing.  Rather than obtaining loans every now and then in order for you to pay your monthly obligations, why not take the option of taking a single loan that will allow you to repay all your outstanding debts?  With this, you’ll only have to worry about paying one credit account every month with a much lower interest.  This will also relieve you from stress and that you already can possibly save money.  Another benefit of debt consolidation is that this will help improve you credit rating provided that you’ll be able to settle your monthly dues on time.

3.    Individual Voluntary Arrangement

An Individual Voluntary Arrangement or IVA works almost similarly to a debt management.  The only difference is that in an IVA, there is a legal agreement between you and your creditors.  Your creditors must agree with your plan for this to take effect.  The IVA can cut down your debts up to 70%, which can really help you recover from your severe indebtedness.  This is type of debt solution is realized with the help of an IP or an Insolvency Practitioner.

4.    Bankruptcy

This is the very last debt solution that you should be considering.  This may solve your debt problem, but you will have to bear with its consequences for a long time, such as a negative credit score.