Many who have accumulated excessive credit card debts are unaware of the numerous strategies to reduce debt. Instead of filing bankruptcy, it would be wise to research other methods of debt reduction and elimination. Although bankruptcy will remove debts, the effects of filing a chapter 7 or 13 are long-term. There is a better way to handle too much debt. Here are few tips on ways to quickly eliminate debt and restore credit rating.

Unsecured Debt Consolidation Loans

If contemplating consolidating debts, there are two options available to consumers. Many people with excessive debts have been able to maintain a good credit rating. If this applies to you, it may be possible to get approved for an unsecured personal debt consolidation loan.

Typically, these loans require a credit score of at least 720. Moreover, if applying for an unsecured loan, lenders prefer applicants who gross a high salary.

Debt Consolidation and Credit Counseling Agency

Many consumers will not qualify for an unsecured personal debt consolidation loan. In this case, using a debt consolidation or credit counseling service is useful. These services are not like traditional debt consolidation loans. However, debt consolidation agencies combine debts, and establish a payment plan with a lower interest rate. Payments are submitted to the agency, and the debt consolidation agency pays your creditors.

Try using one of ABC Loan Guide's Recommended Debt Consolidation Companies.

Eliminate High Interest Credit Cards with Debt Settlement

If your debt amount is more than you are capable of handling, consider a debt settlement. Debt consolidation loans are ideal for individuals with moderate debt. Unfortunately, many consumers have acquired an outrageous amount of debt. In this case, debt settlement may be a better option.

Debt settlement agencies differ from debt consolidation agencies. With a consolidation, the agency will negotiate lower rates, which lowers monthly payments. The debt amount is not reduced; thus consumers eventually pay the full balance on credit cards.

A debt settlement entails a company negotiating a debt reduction. With this option, consumers become responsible for only 50% of their total debt amount. Because debt settlement will damage credit history, this approach should be reserved as a last resort.