The average American is buried under more than $90,000 of debt. While this can seem overwhelming, particularly if you’re part of that statistic, all is not lost. There are several ways you can get out of debt.
As with anything meaningful in life, however, it’s going to take time, work, and sacrifice. But we are more than confident that you can become debt-free.
But what is the best debt relief option? What if you have bad credit? Can you still find a way out of debt?
Keep reading for everything you need to know.
1. Debt Repayment Plans
Hands down, the best debt relief option is to pay off the debt you have by yourself. This prevents you from owing anyone else money or damaging your credit by filing for bankruptcy. However, for some people, this can also be the most difficult option.
We recommend the Debt Snowball strategy. It’s relatively simple:
- Put every extra dollar at the end of the month toward your smallest debt
- Continue to pay your minimum payments on other debts
- Once the first debt is paid off, put that minimum payment plus all extra money toward your next smallest debt
- Thus, your debt “snowball” grows and you pay off debt more efficiently each month
If you don’t have any extra money at the end of the month, put yourself on a budget and limit unnecessary spending like dining out, paying for multiple TV/movie services, online shopping, etc. You can also find ways to earn more money by getting a part-time job, driving for Uber, or donating blood plasma.
2. Debt Consolidation Loans
Debt consolidation loans are some of the best debt relief options if you have decent credit. If you’re eligible, you can get approved for a loan with relatively low interest. This loan absorbs some, most, or all of your smaller debts.
If you can’t get all of your debts covered, get rid of the ones with the highest interest rates. Then, you’ll have a single payment that’s smaller than the combined payments of the individual debts. You’ll also lose much less money over time due to interest.
3. Refinancing Your Mortgage
If you can’t get approved for a consolidation loan, you may be able to pursue the same strategy using your mortgage. If you have positive equity in your house, you can refinance and use the equity to pay off your debt.
Once again, this strategy generally demands a decent credit score. However, it also means increasing the loan on your home and extending the terms.
4. Filing Bankruptcy
Perhaps the best debt relief option for bad credit is filing bankruptcy. This is assuming you don’t have the ability to pay down debt on your own.
Chapter 7 bankruptcy allows you to wipe out some or all of your unsecured debts. However, the government must decide that you don’t have the ability to pay the debt back on your own. You must also go through financial and credit counseling.
Finally, Chapter 7 bankruptcy sometimes results in forfeiting personal possessions like your home or car, if there’s equity in them.
Chapter 13 bankruptcy is a program designed to help you repay your debt in three to five years. After the term of your bankruptcy, any leftover debt will be forgiven, provided you made the required payments during the three to five years. Chapter 13 does not apply to house payments, car payments, or tax debts.
Chapter 13 bankruptcy is one of the best debt relief options for bad credit, especially if you earn too much money to get approved for Chapter 7 bankruptcy. As with Chapter 7, you must go through financial and credit counseling.
We recommend hiring a bankruptcy attorney to help you make the best decision for your circumstances and protect your assets.
Looking for More Information About Debt Relief Options?
As you can see, just because you have a lot of debt, it doesn’t mean you’re without options. Take your time to choose the best debt relief option for your situation. Think about the long-term consequences and effects of your choice.
And if you’re looking for more help, check out some of our other articles for more financial and legal advice. Our blog was created to help people like you, whether you’re struggling to make ends meet, looking for a new career pather, or simply seeking more knowledge. Good luck!

Nicole Ann Pore is a writer, an events host and a voice over artist. Travel, health, shopping, lifestyle and business are among the many subjects she writes about. Through quality and well-researched writing, she informs and even entertains readers about things that matter. She is also interested in film critiquing and filmmaking. Giving all the glory to God, Nicole graduated Cum Laude from De La Salle University Manila, Philippines with a Bachelor’s Degree in Communication Arts.