Crushing debt makes life unbearable. Every day becomes a struggle with debt and creditors. For some, it's hard to see a way out. It's not hard to get overwhelmed by debt. When income declines, debts that were once easily manageable become oppressive. In today's economy, job loss is not unusual, and where there is no job, there is no money to pay debts. Marital problems contribute, too, when one income with two earners gets severed into two single incomes, neither one of which is sufficient to meet overhead. Many times medical crises are the cause. If one becomes ill or is injured and cannot work, then income shrinks and debt payments become impossible to make. Many circumstances leave people short of money and unable to pay debts.

There are some possible solutions to this catastrophe. Bankruptcy is one, and many people file bankruptcy in the hope of getting relief from their debts. Sometimes this is an effective solution, but sometimes it is not. People can only use the all-encompassing Chapter 7 bankruptcy once every seven years, and if someone filed just two or three years before the current crisis, then Chapter 7 will not provide any relief. Also, even though debts can be eliminated in bankruptcy, a creditor's secured claim in financed property cannot. If the debt presenting a serious issue for someone is a car loan, for instance, but they cannot do without the car and cannot replace it, then bankruptcy won't help because the creditor's lien against the car will not be affected. The power of repossession will continue in force despite the bankruptcy filing. In that instance, the only recourse for the person in debt trouble will be to work with the creditor, even though without available money that can be hard to do. Some people also will not consider bankruptcy looking upon it as an egregious personal failing or even as an act of fraud. These people will find no legal means of recourse and will continue struggling under their unmanageable debt load.

There are two other alternatives people have turned to for relief from blinding debt. The first is to enter into a Debt Management or debt consolidation program with creditors. This is a program that is facilitated by a third party negotiator to arrange for the combination of all of a person's debts into a single monthly payment. Ideally, interest rates and fees are reduced or eliminated. The payer makes a single payment to the negotiator, who in turn disburses it in shares to all creditors. The benefit to the payer is that there is just one payment to make instead of several to different creditors, and that one payment will probably be less than the sum of all payments due previously. There is no loan or financing involved, and credit is not at all a factor. Debts are paid off eventually, but the total cost is reduced. Creditors may or may not report these arrangements to credit bureaus, but the paying individual is performing under the debts in some fashion anyway. It is not really possible for an individual to negotiate such an arrangement him or herself. Instead, the assistance of a non-profit third party negotiator will be needed.

The second alternate debt resolution program is Debt Settlement. In Debt Settlement, payoffs are reduced through negotiation with creditors. Debts are paid, but are paid in reduced amounts. They are also paid in variable installments. A creditor may receive no payment for several months, and then receive a lump sum in partial or full payment of the agreed amount. These terms are also negotiated through a third party facilitator rather than the debtor him or herself. A Debt Settlement program may save a debtor thousands of dollars and provide for earlier repayment than would have otherwise been possible.

American Debt Solutions is a non-profit agency providing education and assistance to consumers in debt management and repayment. The American Debt Solutions website provides extensive information on debt issues, along with budgeting help for debt repayment. American Debt Solutions also provides assistance with Debt Management and Debt Settlement programs.

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