1. Do Nothing
 
For most people this is not a very logical solution, but it is still an option. However, selecting this route means you accept that you are losing a fortune in interest to the banks with no end in sight. We refer to this as “the credit treadmill”.  When only paying minimum payments, debts can often take 20 or more years to pay off. You pay out hundreds to thousands a month, only to have the majority go to interest. You’ll see your principal balances go nowhere for years. We’ve discovered that thousands of Americans will rob Peter to pay Paul. That scenario means borrowing from one credit card to pay another in hopes that somehow in the near future you can get back on track. The results end up with a person deeper in debt with no hope in sight.
 
2. Attorney based Debt Settlement
 
With attorney-based debt negotiation, your accounts are settled without filing for bankruptcy.  Many people who do not qualify for bankruptcy feel overwhelmed and think that there is no way for them to ever get out of debt. Once a creditor knows that you have a law firm representing you, they know that you’re serious and refuse to deal with their hassling, harassment, and abuse. Many creditors also fear that you may file for bankruptcy.
 
Most creditors, if handled properly by an attorney, will accept a debt settlement for less than the balance owed. In most cases saving the debtor thousands of dollars and helping them become debt-free in a fraction of the time they otherwise would have. But keep in mind that if you are current with your debts, then the creditors will only expect payment in full. Only when an account goes into default (past due status) will the creditor consider accepting less than the amount owed.
 
Rather than making monthly payments to your creditors, this option negotiates lump sum settlements with your creditors, frequently reducing your debts by up to 50% to 60% or more of your principal balances. This program usually takes only 1-3 years to complete, so this is a great option for people to rid themselves of debt in a relatively speedy manner.
 
A debt negotiation attorney is a lawyer who specializes in debt reduction. There are times when the attorney will advise a client to file for bankruptcy, but most of the time they will negotiate with your creditors to reduce your balances.

A major benefit of hiring a debt negotiation lawyer is that they have vast experience with getting a better deal with a creditor than you could get for yourself.
 
When to Use a Debt Negotiation Attorney

Debt negotiation attorneys are not the answer to every debt problem. If you want to use World Law Debt Settlement to help you, the debt needs to be significant, usually in excess of $10,000.
 
Your debt needs to be unsecured. Your car loan, for example, is a secured debt, because if you don’t pay on the loan, your car can be repossessed. Your credit card debts are among unsecured debts, which will be collected aggressively by your creditors before they’re finally willing to let them go.
 
Examples of typical unsecured debts are;
Personal loans

Lines of credit

Credit cards

Payday advances

Subsidized student loans

Repossessed auto loan residual balance

Foreclosed home residual balance

Old utility bills

Medical bills

Collection accounts
 
For optimal results, you place a reasonable time limit. Are you planning to get a loan in the near future? Debt settlement takes some time to achieve a favorable negotiation outcome. If you set an unreasonable date to reach a debt settlement you’ve weakened your debt negotiation attorney’s bargaining position significantly.
 
If your financial situation meets the above mentioned conditions, then hiring a reputable attorney at the right time can help reduce your debts significantly. In addition, you can expect to relieve yourself of the stress caused by the debts.
 
3. Obtain a Debt Consolidation Loan.
 
You must have something valuable to attach as collateral for this to be an option. Many people will use their home equity for this purpose. This is often referred to as “debt conversion”. You’re not reducing your debt, just converting it from low-risk unsecured debt into high-risk securitized debt. Statistics show that a high percentage of people who acquire debt consolidation loans end up back where they were, deep in credit card debt within 5 years. Though this time, there is an additional secured payment that must be made on the consolidation loan. This option can, without financial diligence force a family into bankruptcy.
 
There exist unsecured debt consolidation loans which require no collateral, but most people that seek for this type of loan are denied because of their current debt to income ratio regardless of how good their credit is. Although you may think your credit is first-class because you’ve never missed a payment, there is another factor in play. The second important aspect of your credit score is your debt to credit limit ratio. If your debt exceeds 50% of your credit limit, it’s too high. Despite the fact that your income may be high enough to handle the payment, you’ll likely be denied.
 
4. Credit Counseling Services
 
Most credit counseling organizations are non-profit and funded in part by creditors. They are designed to have you make one monthly payment to their service, which they disperse to your various creditors. Occasionally creditors will reduce the interest rates on your accounts if you meet their requirements. It’s of note that you’re still paying back your entire balances plus interest, which can often be the same as what you’re paying now plus their monthly fees. Your creditors are not reducing any of your balances that you owe, just the interest.
 
If you miss a single payment, you can get be removed from their program by your creditors. Once removed from a credit counseling program, many creditors will not allow you to start another program for a year or more. That equates to more time for high interest to accrue on your debts, then you’re back in their hands, harassing phone calls and all. The rigid structure of this type of program means that close to 75% of people who enroll into credit counseling services fail to ever complete them.
 
5. Bankruptcy
 
For most people, bankruptcy is considered a last resort option. It can appear on your credit report for up to 10 years, and is also a matter of public record for anyone to see for the remainder of your life. You must be aware that filing for bankruptcy means you will have to file in a court, and certain types of bankruptcies require a court-appointed trustee to control and oversee your estate. If you qualify for bankruptcy, you may as well be surprised that you may have to forfeit many of your assets. The 2005 Bankruptcy Act made changes to the law which made it very difficult for many Americans to totally wipe out their debts. In many cases you may have a court ordered repayment plan, which could be up to 60 months.