6 Real-Life Ways to Get Rid of Debt Faster

If you are struggling with debt, you aren't alone. Many people are in the same boat. If you happen to owe money on your credit cards, don’t feel bad. Just having credit card debt doesn’t mean you’re doing anything wrong. 

Sometimes taking on credit card debt is a necessary way to get through a financial emergency, like paying for an expensive car repair or an unexpected medical bill. Credit card debt doesn’t always mean that people are being reckless with their money or making bad choices. Credit card debt is often caused by a few months of lower-than-usual income or higher-than-usual expenses. 

When it seems like everything from groceries to car insurance is getting more expensive, it’s no wonder that some people find themselves taking on credit card debt from time to time. 

It’s okay to have some credit card debt, as long as you understand the costs and have a plan to pay it off. Unfortunately, in some situations, your debt might become unmanageable. 

If you’re falling behind on credit cards or other loan payments, only paying the minimum balance on credit cards, or trying to juggle minimum payments across multiple credit cards, these could be signs that you need debt relief. If you’re feeling financial stress from your credit cards or other debts, exploring debt relief options could help you ‌take control of your situation and improve your finances.

Learning about the different methods of resolving debt will help you decide which one is right for you.

Understanding Your Debt Relief Options Overview

Debt relief options can include a range of choices and solutions. Some can be done by yourself, while others involve getting help from financial professionals. 

Your options for resolving debt yourself (the DIY approach) without professional help could include: 

• Pay off the debt yourself.

• Ask for help from a creditor’s hardship programs.

• Make the creditor an offer to resolve the debt for less than the full amount you owe. This is what’s commonly known as debt relief or debt settlement.

• Get a debt consolidation loan (this is technically not a “debt relief” solution, but it can be a good strategy for dealing with debt if your debt consolidation loan gives you a lower monthly payment). 

Professional solutions for resolving debt include: 

• Debt management programs (DMPs) offered by consumer credit counseling agencies.

• Professional debt settlement programs

• Filing for bankruptcy protection with the help of an attorney. 

DIY solutions for debt relief are a great first step. . But if you feel overwhelmed by the process, you might want to reach out for professional debt relief options. 

Signing up for professional debt relief help is not a sign of weakness—it’s a sign of smartness and strength. If your personal finances have reached the point where you need some extra help, professional debt relief can help you resolve your debt faster, and get to a better place in your financial life. 

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When to Seek Debt Relief Help

Most people have some type of debt, whether that's mortgage debt, a car loan, a personal loan, or credit cards. Owing money isn't a problem or a moral failing, it’s just part of everyday life in America’s modern financial system. 

Debt can be a good thing if the debt helps you afford a better life and bigger opportunities. This might include an auto loan that helps you have safe, reliable transportation to get to work, a home mortgage that helps you build wealth through home equity, or student loans that help you get a better-paying career. And even credit card debt is okay if you need to cover some short-term expenses or one-time emergencies—as long as you can make your monthly payments and have a plan to pay off the debt. 

But if you end up taking on too much debt, especially high-interest credit card debt, it can become a problem. If you’re starting to see any of the following warning signs in your personal finances, you might need debt relief. 

Here are a few warning signs of excessive debt: 

• You're struggling to make your monthly payments.

• You can't accomplish other financial goals because you owe too much.

• You make payments, but the balance doesn't decline much because your interest costs are so high.

• You can only afford to make minimum payments on your credit cards. This could mean that you need a lot more time to pay off the debt, costing you hundreds or thousands of dollars in interest. 

• Your credit utilization rates are too high. That’s your credit card balance compared to your credit limit. High credit utilization can also hurt your credit score, which can drive up your borrowing costs. Maxing out a credit card is a sign of possible financial distress.

• You're worried about your debt to the point that it impacts your daily life. You’re having trouble sleeping, you’re showing physical illness symptoms like an upset stomach, you’re afraid to open the mail or check your credit card statements. 

If you find yourself experiencing any of these issues, then it's time to look into debt relief options that could improve your situation. 

Your debt-to-income ratio can also give you a clue about whether you've taken on too much debt. This is how much you owe versus how much you earn. To calculate it, you'll add up all of your monthly payments and divide that amount by your gross (pre-tax) income. 

For example, if your credit cards, car loan, mortgage, and other debts add up to $1,000 per month and your gross income is $3,000, you'd calculate your DTI ratio by dividing $1,000 by $3,000 and multiplying by 100. So, in this case, you'd have a 33% debt-to-income ratio. 

If your DTI is above 50%, you may have taken on too much debt, and you could have a harder time getting approved for new credit in the future. It may also be worth exploring credit card debt relief or other debt-relief options when your DTI is this high.  

Create and Review Your Budget

No matter what debt relief options you choose, start by understanding your budget. If you feel like your monthly spending is out of control, if you don’t know where your money is going, if you feel helpless to pay off debt or save money…these are all signs that you need a budget. 

Budgeting is empowering. You can still have fun on a budget. Budgeting can help you understand exactly how to get what you want most out of your money, without negative surprises on your credit card statement each month. 

Why is budgeting important for debt relief success? Because there are costs involved with all debt relief options, even when filing bankruptcy, when most people will have to pay court fees and attorney fees. If you choose debt settlement or a debt management plan, you’re going to need to understand your monthly income and expenses so you can set aside extra cash for payments to creditors. 

Getting a handle on your budget is a must-have for your financial success, no matter how much or how little you have, or what debt relief path you choose. Budgeting helps you find the areas to cut back on spending, cancel unused subscriptions, or zero in on other ways to save money or make more money.

There are many easy tips and tools for making a budget plan. Zero-based budgeting is one easy-to-use budget approach that gives every dollar a job. Or if you’re eager to make fast progress to get out of debt, you might want to try a bare-bones budget to cut your spending.

Contact Your Creditors

If you’re having trouble making payments, if you’re about to miss a payment, or if you want to see what help is available to you, contact your creditors. 

Here are a few types of debt relief that you might be able to get for yourself by contacting your creditors. 

Hardship programs

Many creditors offer hardship programs or forbearance options for customers that are having financial difficulties. If you have lost your job, had hours reduced at work, or experienced another short-term financial hardship, your creditor might be willing to work with you. Some hardship programs could include forbearance, where you’re allowed to delay payment on a loan or credit card. 

Payment modifications

Instead of skipping a payment or delaying a payment, some creditors might help you set up a new payment plan for a loan, with lower monthly payments spread out over a longer period of time. Keep in mind that you might end up owing extra interest. Also, you might owe a catch-up payment at some point in the future. Payment modifications are typically a short-term way to relieve financial stress.  

Rate reductions

If you want a lower APR on your credit card or loan, you can ask your creditor to reduce your rate. This is worth a try, but don’t get your hopes up. Asking for a rate reduction is usually most successful when you have great credit and you’re a longtime customer in good standing. 

This might work for most people who are falling behind on their bills, but it’s worth a try. Creditors are known to reduce interest rates for people enrolled in a debt management plan, especially when those borrowers agree to close their credit card account to avoid new transactions. 

Negotiate debt (debt settlement) 

You can try a DIY approach to debt settlement. You don’t have to use professional debt settlement services. Instead, you can negotiate with creditors yourself, by asking them to accept less than you owe but consider it payment in full. 

Here are a few tips for successful debt settlement negotiations with creditors: 

• Get it in writing. Keep careful records of all your communication with creditors and debt collectors. Get a debt validation letter, keep your account statements. Understand the exact amounts that you owe, and watch for any important letters in the mail such as court summons or notices of the creditor’s intent to sue you. 

• Save extra cash. Open a separate account and stash extra money there each month. This is the money you could use to make settlement offers to get rid of your debt. 

• Negotiate with your creditor. This could take several rounds of phone calls. Creditors want to be repaid in full. Be prepared to document your financial hardship and explain why you can’t fully repay your debts. 

• It’s never too late to negotiate. Even if a creditor sues you and takes you to court, you can talk with them, talk with the judge, and try to work out a payment plan or an acceptable settlement offer.  Creditors know there’s no guarantee they’ll win in court, and a negotiated agreement might be their most favorable outcome.

Talking to your creditors is almost always a good move, no matter how much you owe or what kind of financial difficulty you’re going through. Not every creditor will agree to a debt settlement offer, or will even be open to negotiating. 

But creditors ultimately want to get paid and will often be reasonable in trying to find a solution, even if that means settling your debt for less than you owe. 

DIY Debt Relief

When you're overwhelmed with debt, DIY debt relief is an option. You can take steps on your own to manage your debt, including the following.

Use the debt snowball method to pay off debt

With the debt snowball method, you make minimum payments on all your debts except the smallest one. On that one, you pay as much as you can until it’s paid off. Then continue to the debt with the next lowest balance until all your debts are repaid. The idea is that paying off your smallest debts quickly will help you stay motivated. 

Debt snowball pros: 

• Get fast results by paying off smallest debts first 

• Build momentum and feel in control with “quick wins” 

Debt snowball cons: 

• You might owe more total interest 

• By leaving larger debts for later, you might start to lose motivation and feel overwhelmed

Use the debt avalanche method to pay off debt

You'll make extra payments on your debt with the highest interest rate first using this method, then move on to the debt with the next highest rate. This saves you the most money on interest. But if your most expensive debt is large, it could take longer to reach your first payoff. 

Debt avalanche pros: 

• Reduce your total interest costs by focusing on highest APRs first 

• Feel confident that every payment is making the biggest financial impact 

Debt avalanche cons: 

• You might get impatient to see that big debt go to zero 

• Seeing your smaller debts get bigger (with only minimum payments) could feel demotivating 

Read: Debt Snowball vs. Debt Avalanche: Which Is Better?

Explore debt consolidation

When you consolidate debt, you'll take out a new loan and use it to pay off multiple smaller debts. You may be able to lower your rate and simplify repayment since you'll have only one payment to make after consolidation. 

Types of debt consolidation loans can include a personal loan, a home equity loan, or a balance transfer credit card. But keep in mind that to qualify for a low rate on a debt consolidation loan, you typically will need to have fair to good credit. 

Debt consolidation might not be a good choice for people who have lower credit scores or who have already fallen behind on their bills. Balance transfer credit cards can also be a risky option for people who already have high levels of debt. Opening a new card might cause you to keep spending instead of paying down your balance. 

Debt consolidation pros: 

• Save money on interest by rolling your debts into a new loan or credit card at a lower interest rate (such as a 0% balance transfer card)

• Simplify your debts with one monthly payment instead of multiple accounts

Debt consolidation cons: 

• Not a good option for people with lower credit scores or overdue debts

• Debt consolidation doesn’t get rid of debt, it just moves it to a new account. You still must make a plan to pay off the debt 

Negotiate your debt with creditors

You can ask your creditors to accept less than the full amount you owe but consider it payment in full. You could suggest a single lump sum payment or a payment plan. 

Debt negotiation pros: 

• Reduce your total debt amount and get rid of debt faster 

• Avoid serious consequences like lawsuits and bankruptcy 

Debt negotiation cons: 

• Debt settlement (whether DIY or with professional help) typically has a negative effect on your credit standing

• You might owe taxes on the amount of forgiven debt

Each of these debt relief options requires time and discipline. 

Dealing with debt can be overwhelming and frustrating. Negotiation with creditors could be difficult and stressful; not everyone wants to have tough conversations with debt collectors or credit card companies, and not everyone knows how to make a competitive offer for debt settlement. While DIY options work for some people, others appreciate professional guidance.  

Credit Counseling

If you are having trouble paying your credit card bills, credit counseling and debt management plans (DMPs) are debt relief options that you might want to try. With credit counseling, you can work with a qualified counselor from a nonprofit agency that will work with you to create a repayment plan that fully pays off your unsecured debts in three to five years. With a debt management plan, you typically will have to make just one monthly payment, through your credit counselor, which the credit counselor then pays to your creditors. A debt management plan helps you streamline your monthly debt payments. A credit counselor helps you learn to manage your money.

Credit counseling pros: 

• Get professional help to pay off credit card debt 

• Simplify your debts with one monthly payment, managed by the credit counselor 

• Credit counseling agencies might be able to negotiate a lower interest rate on your debt, helping you make more impact with each payment. They might also get your creditors to waive fees.

Credit counseling cons: 

• Credit counseling is a long-term commitment; it typically takes three to five years to get rid of debt

• Debt management plan monthly payments are typically very high.

• You’ll have to close your credit cards and agree not to use credit while you’re in the plan

If you want to learn more about credit counseling or talk to a counselor near you, you can find qualified counselors through the National Foundation for Credit Counseling (NFCC.org) or the Financial Counseling Association of America (FCAA.org). 

Professional Debt Relief 

If your debt feels unmanageable and you aren't comfortable exploring and implementing solutions yourself, it's time to get professional debt relief help. 

As Freedom Debt Relief testimonials show, many people appreciate having a professional help them find a solution or negotiate with creditors on their behalf. A professional debt relief company can evaluate your debt situation and help you choose the solution that works for you. 

Debt management plan (DMP)

Nonprofit credit counseling agencies can help you implement a debt management plan if you have unsecured debts. Personal loans and credit cards are two common examples of unsecured debts.

When a credit counselor helps you create a debt management plan, your counselor will reach out to your creditors to ask them to reduce your interest rate or waive fees. 

You will deposit money into a special account with the credit counselor as part of your DMP instead of making payments directly to your creditors. Your counselor will then distribute the money among your creditors according to the terms of the plan. The credit counseling service also collects a monthly fee from your payment.

Debt management has a lower impact on your credit score than debt settlement or bankruptcy because you completely repay your creditors. However, your credit cards are typically closed as part of your plan, which typically lowers your credit scores until you pay off those accounts.

A DMP is designed to fully pay off your unsecured debts in three to five years. You'll need to make sure you can keep up with the monthly payments to make the plan work. 

Who is this good for: People who don’t want to declare bankruptcy, who don’t mind having their finances monitored and managed with the help of a counselor, and who can afford to make fixed monthly payments for three to five years.

Debt settlement

Also called debt relief, debt settlement could be an effective way to reduce your debt. Debt settlement involves a creditor agreeing to accept less than the entire amount owed as full payment. Creditors are more likely to do this if you are clearly experiencing a financial hardship and negotiating an agreement looks like their best chance of getting paid anything at all. 

When you work with a debt settlement company, the company will negotiate with creditors on your behalf. Debt settlement companies charge a fee. They often have relationships with creditors and understand effective negotiation techniques, so they may be able to help you get a better deal than you could get on your own. 

Debt settlement plans can take time, as you'll need to get together enough money to make each of your creditors an offer. It’s hard to afford to save money when you’re struggling with debt. Most people choose to stop making payments to creditors while they build up funds for settlement offers. The money goes into a dedicated account set up by the debt settlement company, but you always own and control the account. 

Stopping payments will have a serious negative impact on your credit standing.

Once there's enough money in that account, your debt settlement company can start negotiating. Most people settle their first debt within a few months. 

Forgiven debt may be considered taxable income by the IRS. But if you’re insolvent when you begin settling debts, meaning your debts are worth more than the things you own, the forgiven debt won’t be subject to income tax.

Debt settlement is often the first step in building a better financial future, as you get rid of your debt, pay your bills on time, and avoid maxing out your credit cards in the future. 

Who is this good for: Debt settlement programs can be a good choice for people experiencing a financial hardship who want to get rid of debt faster than by making minimum payments (debt settlement programs have a typical target timeframe of two to four years). It’s a good strategy if you want to avoid bankruptcy, and if you can’t afford the required payments for a debt management plan. 

Related: Here’s how Freedom Debt Relief works

Bankruptcy

If you need legal protection from your creditors, you might be a candidate for bankruptcy.

Chapter 7 bankruptcy lets you walk away from your unsecured debts. This kind of bankruptcy is means-tested. Translation: You can't qualify for this debt relief option if you have the means to pay back your debts. If you file for Chapter 7, you could lose some of the things you own. The bankruptcy court could sell them and give the money to your creditors. 

Chapter 7 can often be completed in a matter of months.

If you earn too much to qualify for Chapter 7, you’ll be directed to Chapter 13 bankruptcy, which is a payment plan. There's no means test and the court won’t sell your belongings. You won't just have your debt wiped away, though. You'll be placed on a repayment plan lasting for five years (three years if you’re low income). You'll pay off your creditors according to the terms of the plan, and any balance left on unsecured debt at the end will be forgiven.

Bankruptcy can stay on your credit report for seven to 10 years and will negatively affect your credit score. However, it can provide a clean slate and a chance to start anew. You'll likely need a lawyer to help you with the process, though, so you should be prepared for legal fees. Bankruptcy is also public, and future employers can see that you filed. 

Who is this good for: People who have no realistic ability to pay off their debts, who want legal protection from creditors, who are willing to follow a judge’s orders for possible partial repayment of debts or selling some of their property. Bankruptcy also requires you to accept a big negative impact on your credit report, and possible consequences from having your bankruptcy listed as a public record. 

Ultimately, all of these debt relief options can be appropriate in the right situation. Your best solution depends on how bad the problem is, how comfortable you are tackling the problem yourself, your desire to keep your solution private, and how much control you’re willing to give up.

Pros and Cons Comparison Table

How to Choose the Right Debt Relief Option

If you’re ready to sort through your debt relief options and figure out how to get rid of debt in the way that works best for you, here is a simple decision framework. Think about these questions and see which debt relief options could be the best choice for your financial needs. 

Did your debt come from a short-term financial emergency, or a longer-term pattern of spending? 

If your debt happened because of a short-term emergency like a lost job, car crash, or medical condition, you might want to start by contacting your creditors and asking about hardship programs. They might help you with short-term debt relief options until you’re back on your feet. 

If your debt has built up over time because the cost of living is too high and your income is too low, then you might need a more long-term debt relief solution. Consider credit counseling (with a debt management plan) or a debt settlement program. 

Do you have a steady job and confidence to make a plan to pay off the debt? 

If your income is stable, you’re eager to learn about money and take control of your finances, and you feel confident to tackle the debt yourself, you should try to use budgeting tools, money-saving apps, and other strategies to pay off debt faster all by yourself. 

If you feel like your debt is already too high to pay off anytime soon, or if you feel overwhelmed by your debt and stressed-out about paying bills, you should consider debt relief solutions such as debt settlement programs or bankruptcy. 

Do you enjoy budgeting and managing your own money, or would you feel more comfortable working with a financial professional? 

If you’re confident in your ability to use the DIY approach to personal finance, feel free to try paying off your own debt or negotiating with your creditors. 

But if you don’t want to have tough conversations with creditors or if you’re tired of getting calls from debt collectors, consider talking to a professional debt settlement program.  

Has your credit already taken a hit due to late payments or overdue debts?

If you have not fallen behind on your bills, if you’re still making monthly minimum payments (or more), you still might be able to comfortably pay off debts yourself with the DIY approach. And if you have good credit, think about using debt consolidation loans to reduce your interest rate and pay off debt faster. 

But if you are already falling behind on credit card bills, you might need professional help from a credit counseling agency or debt settlement program. These types of professional debt relief are often a good choice for people who are already experiencing negative impacts on their credit report. 

Can you afford to make payments as part of a longer-term debt payment plan?

If you have a steady income and you understand how much room you have in your monthly budget, DIY debt payoff could be a good choice. 

But if your debt levels are so high, or your income is unsteady, or if you just don’t want to wait so long to get rid of debt, a debt settlement program or bankruptcy could be a better choice for debt relief. 

Are you open to the idea of filing bankruptcy?

Bankruptcy gives you legal protection from your creditors. It’s the only debt relief strategy that stops (temporarily) all collection efforts, including foreclosure. 

Bankruptcy creates a public record and stays on your credit report for seven to 10 years. Not everyone qualifies for the kind of bankruptcy that lets you walk away from your debt. Talk to a qualified bankruptcy attorney about your options, and make a plan for moving forward with a fresh start in life.