Three Options for Debt Overload

by Kay Lynn

Lots of people get in situations where their debt levels get so high that they can no longer manage them. These situations may occur because an individual got in over their head with too many financial obligations or could take place because of some sort of catastrophe that has taken place. When those situations occur, people look for a solution to their problems. Here are some of the approaches that can be taken to solve long term debt problems.

debt consolidation

Debt Settlement

Anyone that has ever had a debt reach the status of collections knows how much of a hassle collection calls can be. Creditors continually make phone calls until the debt is paid. One of the ways to take care of past due debt is to make a debt settlement offer. A debt settlement offer can reduce the amount of money that has to be repaid to creditors and can help to keep a debt from ruining your credit. A debt settlement agreement can get rid of old debts for just pennies on the dollar.

Debt Consolidation

A debt consolidation loan may just be the solution for the cash strapped person with money woes that is seeking a way to lower their debt obligation. Debt consolidation allows you to take all of your bills and get one big loan so that you can pay them off. A debt consolidation loan can lower your interest rate and your monthly payments so that your bills are a lot easier to deal with. Instead of having to pay several different creditors, you will just need to pay one which helps to simplify your finances.


Bankruptcy is the option of last resort for most people but is a viable alternative. A bankruptcy filing will allow you to discharge many loans to creditors and may even allow you to stay in your home. Bankruptcy is never a pleasant experience to go through but it can give you a fresh start so that you can start over again. Many bankruptcy filers learn from their past debt experiences and go on to reestablish credit and lead productive financial lives.

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Attribution Photo courtesy of wrestlingentropy

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Buck Inspire April 20, 2011 at 10:47 pm

Great breakdown. Nice to know my options. Let’s hope I won’t have to use any. In a bankruptcy, do the companies who are owed money just write it off as a loss?

optionsdude April 22, 2011 at 7:38 am

Yes, the companies simply have to write it off. Hopefully the accounting was cash so they don’t have to go back and restate earnings. The accrual accounting method got some tech companies into trouble having to go back and restate earnings when sales that were booked based upon expected revenues never materialized.

Kay Lynn April 26, 2011 at 5:39 pm

@ Buck, yes companies write off bad debt as an expense.

@ Optionsdude, Thanks for sharing the information about earnings reporting.

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