The availability of credit cards these days made us prone to more debt. These credit cards can be useful and destructive at the same time. If you don’t know how to handle your finances carefully, you will soon find yourself surrounded with debt. If you are already in this situation, I will be teaching you how you can easily clear up your debts. All you have to do is to read this article until the last paragraph.

There are three most basic ways to fix your debts, and these are; debt consolidation, debt settlement, and bankruptcy. I will be discussing each of these solutions as we go on with the discussion.

The first solution is through debt consolidation. This process works by transferring all your debts to a creditor who is charging the lowest interest rate. For example, if you need to pay 9 $100 with 4% interest rates and 1 $200 with 3% interest rate, contact the creditor who gives you 3% interest and ask for a loan equal to the total loans with higher interest rates (in this case $900). If the creditor agrees, you will get the same amount of loan but with less interest rate to pay.

Loan consolidation is a very effective method to use especially if you know how to budget your funds well. However, there are a lot of people who don’t know how to manage their cash properly. Another good option that they can take is the method called debt settlement.

Debt settlement can be achieved by sending a letter to your creditor asking for a new payment term or lower rates. You have to explain to them the financial crisis you are facing right now. Approaching a debt settlement company can also help you clear your debt. They hire financial experts who will talk to your creditors on your behalf, in order to clear your debts easily using legitimate methods. If you have managed to get a reputable debt settlement company, your credits will be cleared within months without affecting your credit ratings.

Finally, the method called bankruptcy. A lot of people are choosing this option because they think that this is the fastest way to get rid of all their debts. Once you file a bankruptcy report, a person will be assigned by the court to manage your assets in order to pay your creditors. This is really an easy way to get rid of debt. However, once you have filed bankruptcy, your credit ratings will be ruined, thus making it hard for you to get another loan whenever you need it.