How to Overcome & Settle Personal Debt

How to Overcome & Settle Personal Debt


Overcoming and settling personal debt can be a seriously daunting prospect. While it may be tempting to bury your head in the sand and ignore it, the ostrich method only causes further problems down the road. Fortunately, there are some basic steps you can take to help you improve your financial standing and eventually get rid of your debt entirely.

Check the Statute of Limitations

Your first step should always be to check the amount of time the debt has existed, as well as the duration of time that collections has to collect. If you are lucky, you may find that credit card debt negotiation may actually be unnecessary. In most cases, old debts and negative marks on your credit report are removed after seven years. However, if the statute of limitations is longer than seven years, the collector can still seek legal action.

Don’t Make Any Hasty Decisions

If you have some time left before the statute of limitations runs out, take a deep breath—you still have options. Many people with substantial personal debt immediately turn to bankruptcy without realizing that there are better options out there. Don’t make any drastic moves just yet. Now is the time to start putting out feelers so you can better understand your next course of action.

Talk to Someone

You may want to confide in close friends or family members for advice, but your best bet is to contact a finance professional. You’ll be surprised how just talking to an experienced expert—or even joining a debt settlement program—can drastically reduce or even eliminate your debt. Additionally, speaking to others about your debt lets you know that you are not alone. Millions of Americans are also carrying large financial burdens.

Try Negotiating

One of the biggest errors people with personal debt make is failing to realize that they can negotiate the terms of their debt. For example, to get a lower interest rate from your credit card provider, sometimes all you need to do is ask. Or, if you have an outstanding medical bill, offer to make one large payment in exchange for lower monthly payments or even a reduced overall debt. It never hurts to ask and you may be very surprised what a polite inquiry can do for your debt.

Consider Debt Settlement

If your collector refuses to budge and you don’t have the finances to meet the requirements, it may be time to look into debt settlement (not to be confused with debt consolidation). According to Financial Solutions of America, debt settlement is usually preferable to filing for bankruptcy.

In short, debt settlement means handing all accounts with outstanding debt over to a debt settlement agency. The debt settlement agency then uses their longstanding connections with collection agencies and creditors to negotiate solutions that aren’t available to the average person. In most cases, creditors and collection agencies prefer to work with debt settlement companies because they realize the only other option for many people is filing for bankruptcy. Once someone files for bankruptcy, collection agencies and creditors get nothing.

image Dan Moyle
image Dan Moyle

Use All Available Resources

When it comes down to it, the ideal solution for one person is not always the right one for you. Spend time doing research so you can be absolutely positive you’re making the right decisions every step of the way. If you can afford to, hire an accountant or other unbiased finance professional for advice. If you don’t have the means to hire a professional, many firms offer free consultations. For additional resources, don’t be afraid to turn to the Internet for help. It’s a vast resource with plenty of information. Remember, you do have options where a brighter, financially secure future awaits you.


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