Getting out of debt, especially credit card debt, can be a very difficult task and the stress that goes along with it can be even more taxing. Credit card debt can lead to issues with relationships and family, and has even been known to cause depression. The average number of filings for bankruptcy by businesses and individuals over the past five years was 1.32 million per year. Luckily, there are several options that can lead to financial stability and a stress-free financial situation. There is not a one size fits all solution, so knowing which option works best for you is important.

1. 5 Options
presented by
for getting out of debt

2. Introduction
Getting out of debt is no easy feat. Having too much debt can strain your relationships, put
added stress on your family, and even cause depression. The average number of filings for bankruptcy by businesses and
individuals over the past five years was 1.32 million per year. There are several ways you can go about getting out of debt
and what route you choose should be unique to your situation and the needs of your family. There is no one size fits all
for debt pay off. One of these five options may work for you:
2
DIY Debt Reduction
Consolidation
Credit Counseling
Debt Settlement
Bankruptcy

3. 3
DIY Debt Reduction
With the DIY approach, you make the minimum payments on all of your debts
except the one you are targeting. Once the first debt is paid off, you apply the payment you were
making to the next target debt, and so on until they are all gone. There are two main variations
on this strategy:
Snowball
Method
Pay off the account
with the smallest
balance first.
Avalanche
Approach
Pay off the credit
card with the highest
interest rate first.
DIY debt reduction may work for you if: You have a clear plan
and are committed to sticking with it; you are able to stop taking on new credit card debt for the
duration of the program; and you have enough cash flow to pay off your balances in
approximately 3 years or less.

4. 4
Consolidation
If you are able to consolidate your debts, you will get a new loan
to pay off other debts. Then you will pay off the new loan as quickly as possible. You may be able
to consolidate with a personal loan or by using balance transfers to low-rate or 0% credit cards.
Consolidation may work for you if: You are able to significantly reduce
your interest rates, and are able to pay off the new debt in roughly three years or less. Combine
consolidation with a DIY debt reduction plan. Put your credit cards somewhere that they won't be
easy to get to, so you won't be tempted to run up new debt while you're still paying off this loan.

5. 5
Credit Counseling
A reputable credit counseling organization will typically review your
budget with you for free, and help you figure out if a Debt Management Plan can help you get out of
debt faster. If you enroll in a DMP, your credit card issuers will typically reduce your interest rates,
and you'll make one monthly payment to the counseling agency, which will then pay each of your
creditors. According to the most recent Transparency Project report from Cambridge Credit
Counseling, clients received:
A DMP may work for you if: Your creditors lower your interest rates enough
to provide breathing room in your budget, and you have enough income and cash flow to pay back
your debts in five years or less. Take advantage of the education and support programs offered by the
counseling agency, and reach out to them immediately if you experience an unexpected financial
setback.
14.49% $141.58less
Avg. Interest Rate
Reduction
Client’s Avg.
Payment

6. 6
Debt Settlement
If your balances are too high to pay them back within five years, or if you're dealing with
significant debt that's been turned over to collections, you may want to consider trying to negotiate settlements with your
creditors. With this approach, the creditor or collector agrees to accept less than the full balance to satisfy the debt.
Debt settlement may work for you if:
You are able to come up with the enough money -- typically around
30 - 50% of what you owe -- to settle your debts in a relatively
short period of time (usually 24 months or less). The funds to settle
may come from savings or a gift from a family member, for example.
Educate yourself on how settlement works.
You may have a stressful few months as you try to negotiate with
the companies to whom you owe money. Before you go this route,
it's a good idea to also talk with a bankruptcy attorney to find out
whether that might be a better option. Also make sure you
investigate upfront whether you will owe taxes on canceled debt.

7. Bankruptcy
If you file for bankruptcy, you may be
able to eliminate most or all of your debts very quickly (in a
Chapter 7 Plan) or over five years or less (in a Chapter 13
Plan). If you are being threatened with debt collection
lawsuits, if your income has been reduced to the point where
you can't make your payments, or if you are simply feeling
overwhelmed with your debt, it's a good idea to talk with a
bankruptcy attorney to find out whether it may provide the
relief you need.
7
Bankruptcy may work for you if: You have significant debts that can be
discharged (eliminated), and your income does not prevent you from doing that. Talk with a qualified
bankruptcy attorney, one whose practice is largely devoted to bankruptcy and helping consumers in
debt. Ask for referrals from financial professionals you trust, or visit NACBA.org.
When you do meet with an attorney, bring all the documentation he or she instructs you to bring,
and be completely honest about your situation. And don't wait until you've been sued or you raided
your retirement accounts to talk to an attorney.

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Sources: http://www.reuters.com/article/2014/01/06/usa-bankruptcy-stats-idUSL2N0KG1DP20140106, http://defeatourdebt.com/5-common-options-for-getting-out-
of-debt-2/, http://www.huffingtonpost.com/creditcom/5-ways-to-get-out-of-debt_b_2397140.html