Debt is a way of life for most Americans, some of it good, much of it bad.

Let’s start with a positive spin: Handled responsibly, debt can be the impetus toward great investments in homes and education, serving as a key economic engine. In other words, if you used credit to buy a home and get a college education, you are on the good side of debt.

Then, there is the bad side.

Debt among U.S. consumers is escalating at a dangerous pace, putting younger generations at a financial risk that was never experienced by their parents. It usually starts with irresponsible use of credit cards and grows worse as unforeseen circumstances like unemployment, medical emergencies or unforeseen changes in a family situation come into the picture.

According to a study by the Pew Charitable Trusts, 69% of American consumers view debt as a necessity, but prefer not to have it. Meanwhile, 85% of Americans believe that others use debt to live beyond their means. Despite that apparent disdain, the debt load for Americans keeps rising.

The Federal Reserve says that the average household debt is up to $132,529 (including mortgages) a jump of 11% in the past decade. Credit card debt and auto loans are climbing over the $1 trillion mark. Student-loan debt has hit a staggering $1.3 trillion with 44.7 million borrowers, who owe an average of $37,172. That figure alone is up 186% in the past decade!

The obvious reason that debt keeps rising is simple: Household income is up 28% in the past 13 years, but the cost of living has increased by 30%. In other words, we’re not making enough money to cover the expenses we take on.

Beyond keeping up with daily expenses, irresponsible spending has taken a toll. The path to a credit crisis is paved through restaurant bills, designer clothes and vacations at five-star hotels. Many families, even with a well-meaning financial plan, don’t pay close attention until the hole gets so deep, there is no way out.

They need solutions.

Where to Find Credit Card Debt Relief Programs

Fortunately, there are several methods to reduce credit card debt – and maybe even eliminate it – in a consistent and logical manner. This can be done on your own, if you have discipline, but it’s often beneficial to partner with financial professionals, who can negotiate lower rates with lenders, refinance homes or create budgets that keep you on the right course.

Debt Relief Pros and Cons

If you’re floundering financially and can’t figure out how to deal with rising debt obligations, consider the pros available in the four debt-relief options:

• Most nonprofit organizations offer credit counseling sessions free, but be sure to check. Some agencies are for-profit and could require fees.
• Lower interest rates and monthly payments. A debt consolidation loan or debt management program should reduce the amount of interest you pay on your debt, plus get you a monthly payment that is more in line with your income. The stability of knowing that you have an affordable monthly payment that eventually will eliminate your debt can remove a lot of the anxiety associated with the problem.
• Credit counseling. Most businesses in the debt-relief industry offer free credit counseling services. Certified credit counselors help consumers build an affordable budget and learn how to live with it. Counselors teach them the debt-relief options available and offer advice on which one best suits their situation. This is an overlooked aspect of many debt-relief services. It increases the financial literacy of consumers by leaps and bounds.
• Reduced amount of debt. It’s possible a lender may forgive as much as 50% of your debt, if you have the resources to handle that much immediately. Lenders want to get paid something. They would prefer getting paid all of what is owed, but they recognize that when consumers are drowning in debt, sometimes it’s best to throw them a life raft.
• A chance to start over. The anxiety of dealing with debt everyday crushes people’s spirits. Choosing the debt-relief option that gives you a way out of debt is a life-changing experience. Nothing feels better than second chance, an opportunity to right the wrongs and prove you’ve learned from experience. Bankruptcy, despite its reputation, will do that. A successful Chapter 7 or Chapter 13 bankruptcy breathes life back into consumers. It brings hope that the lessons you’ve learned about finances can take the stress out of your life.
• Stops the collection calls. If you haven’t settled your debts in 180 days, the lender probably will sell it or turn it over to a collection agency. That could be the start of non-stop calling to get you to pay. Enrolling in a debt-relief plan will stop the calls.

The negatives involved in debt-relief services extend a little further than most consumers realize and that is the reason anyone considering this route should research an option thoroughly before committing to it.

Here are a few of the cons when seeking debt relief that should be taken into consideration:

• Time frame of 3-5 years. There is no instant fix with any of the debt-relief options. It is prudent to allow 3-5 years and optimistic to think you can do it less time. It takes discipline, commitment and time to eliminate debt.
• No guarantees. Lenders usually want to work with you, but they can choose not to. This is especially true with debt settlement. You may contribute to the fund used to make a settlement offer for 6-8 months and then find out the lender won’t accept the offer. If you choose this route, be sure to get a written agreement from the lender that they will work with you.
• Fees for services. Regardless of which form of debt relief you choose, there will be a fee to the company providing that service. The fees for debt management are part of your monthly payment. The fees for debt settlement are based on the amount of debt you have. Lawyers’ fees for bankruptcy vary. That just adds another layer of debt that you will have overcome.
• Late fees and other penalties. If you are not actively paying down your debt, the lender will assess late fees and raise the interest rate so that your debt actually grows. Again, this applies specifically to debt settlement, but could happen with late payments in either a debt management program or debt consolidation loan. Be aware that not making at least minimum payments on your debt each month is going to cost you.
• Tax man awaits. If you have debt forgiven, that probably will count as taxable income and should be reported on your federal income taxes. The lender who forgives the debt should send you a 1099-C tax form detailing how much the original debt was and how much was forgiven. For example, if you owed $25,000 and had $10,000 forgiven, you would have to claim the $10,000 as income on your taxes.
• Credit score takes a beating. This definitely will happen with either debt settlement or bankruptcy. Even if you eventually reach a debt settlement with a lender, there will be a note on your credit report for seven years that says you missed payments and settled for less than what was owed. Chapter 7 bankruptcy stays on a credit report for 10 years and Chapter 13 bankruptcy is there for seven years. This will make it difficult to get a loan for a home or car at an affordable rate.

Some of the professional credit card debt relief programs include:

• Credit Counseling
• Debt Management Programs
• Credit Consolidation
• Debt Settlement
• Bankruptcy

Working with a nonprofit credit counseling agency provides a clear picture of your financial options. They will review your budget, evaluate debt-relief alternatives and suggest solutions.

PROS

• It’s free. Most nonprofit organizations offer credit counseling sessions free, but be sure to check. Some agencies are for-profit and could require fees.
• It’s professional. Counselors are certified by a national organization. They will teach you the basic skills to reduce debt and manage a workable budget.
• It’s thorough. Credit counseling firms don’t portray themselves as quick-fix solutions. It will require multiple phone calls to sort out your financial picture and provide you a budget that is workable. They offer thorough solutions to complicated problems.

CONS

• Do some research. Not all agencies deliver what they advertise. Get advice before choosing an agency. Ask family or friends if they’ve used a credit counseling service. Make sure you get an organization that provides certified counselors.
• Be flexible. The advice you get may not be what you wanted to hear. A good credit counselor evaluates your goals and the resources before suggesting a plan of action.
• Stick to it. It takes patience and perseverance to succeed. Too many consumers drop out of the program before they eliminate their debt.

Debt Management Plan

This is the solution most often suggested by credit counselors. The goal is to eliminate debt by reducing interest rates and fees, while providing a lower monthly payment. Under the debt management plan, you promise to pay back the full principal over time. Debts from credit cards and other lines of unsecured credit can be efficiently managed.

PROS

• It’s organized. You make one monthly payment on consolidated debts, giving you the ability to handle your finances more efficiently.
• It’s good for your credit score. By keeping your payments on track, your credit score will improve over time. There is a tangible reward for consistent payments.
• It’s budgeting 101. Your credit counselor will help you devise an affordable monthly budget that should improve your understanding of money management.

CONS

• The time. This program typically takes 3-5 years to eliminate all debt.
• The Cost: There is usually an enrollment and maintenance fee.
• No Go: If you drop out of the program, you lose the concessions made by your creditors so the interest rate on your debt will go up and there could be late fee payments.

Debt Consolidation

With debt consolidation, you take out one loan to pay off all unsecured debts. In the process, you hope to reduce the interest rate paid on your debts and make one manageable monthly payment. In effect, your multiple debts are combined into one.

PROS

• Several avenues available. If you choose a bank or credit union to get a debt consolidation loan, the competition between them could mean a low interest rate. Finding a zero-percent balance transfer credit card is another avenue.
• They have expertise: Certified debt-consolidation experts can find the lowest monthly payment. They know how to negotiate with lenders.
• Ease financial fatigue: There is an emotional burden to being in debt. Seeing your interest rates and monthly payments lowered will bring a welcome wave of relief.

CONS

• Are you qualified: Not everyone is eligible for debt consolidation loans, especially if your credit score has suffered while you piled up debt.
• Watch out for fees: Read the fine print on that zero-percent balance transfer card. There might be a hidden fee or time restriction that negates other advantages.
• Collateral damage: Beware of secured loans that put your home, car or other assets at risk if you can’t pay back the loan.

Debt Settlement

In a debt settlement, the lender agrees to accept less than the full balance of a debt in return for a lump-sum payment from the consumer. Debt settlement is generally a consideration for people with very poor credit.

PROS

• You may pay less. The consumer usually ends up paying 60-80% of the original debt, but it could be as little as 50%.
• Expertise pays off. Though you could try this yourself, debt settlement companies are experts at negotiating with creditors.

CONS

• There are many. This is considered the highest risk choice for many reasons, tops of which might be that many credit companies won’t accept debt settlement offers.
• It costs how much? Debt settlement companies get paid a percentage of the debt solved or a percentage of the amount saved. When the math is finally done, the fee plus the debt paid often come out to 80-90% of what was originally owed.
• Credit Score Issues: One thing is certain: your credit score will be damaged. The lender, collector or credit-card company will report the debt as “settled for less than agreed’’ or “settlement accepted’’ for seven years. Also, even though you are dealing with the debt-settlement company for payments, the lenders will report late-payment status updates to the credit bureaus. That could be the case until the account is actually settled.

Bankruptcy

This is the last-ditch solution if your financial situation has become so overwhelming that there doesn’t appear to be a way out. Bankruptcy offers a “fresh start” though with lots of restrictive conditions. You can file for either a Chapter 7 bankruptcy, which cancels your debts, or a Chapter 13 bankruptcy, which sets up a 3-5 year repayment plan to eliminate your debts.

PROS

• Starting all over. This is a chance to wipe out all your debt and start from scratch. Hitting the reset button on your finances can restore your peace of mind after what probably was years of daily worries about debt.
• Protection from harassment: When you file for bankruptcy, the court issues an “automatic stay,’’ meaning that creditors will be barred from making collection attempts on your debts through phone calls and letters. Creditors will deal exclusively with your attorney and not you.
• Non-disruption of life: You shouldn’t lose the important assets you own in a bankruptcy. Things like your home, retirement savings, clothing, cars up to a certain value and other personal items are exempt from creditors.

CONS

• Credit score ruined. Starting over applies to your credit score as well. Bankruptcy stays on your credit report for 7-10 years, meaning lenders will see evidence that you could not pay your bills. This means paying very high interest rates for any type of loan, whether it be a credit card or an attempt to get a mortgage.
• It’s Expensive: First, you must search for a good bankruptcy attorney (they don’t work for free). There are court filing fees, paralegal fees, bankruptcy trustee fees, photocopying charges and consumer counseling fees. It adds up quickly.
• Some debts can’t be eliminated: Debts like student loans, alimony, child support and back taxes owed to the government, can’t be eliminated by bankruptcy. You still owe those bills and are responsible for paying them.

Services Consumers Can Handle Themselves

There is a D-I-Y debt consolidation angle to finding debt-relief options. If you want to save some money and potential aggravation, it’s necessary to educate yourself in the areas where it requires a little quick thinking, a phone call or common sense.

But consumers must be disciplined. They must be willing to keep their own records. And it helps to have an open mind because there are times when adjustments are necessary. This isn’t a game for the feint of heart — or the inflexibly regimented mind.

Tracking Your Spending

Where is your money going, anyway? It’s time to get a handle on your daily living expenses, such as groceries, personal items and transportation. Understanding where your money is going is the first step to credit card relief.

PROS

• It’s free: It’s your effort and wherewithal. If you’re trying to eliminate debt, free things will catch your eye. Here’s an obvious one.
• Budget help: When tracking your finances, budgeting can be a snap. And you’ll be surprised where the money is going. No doubt, you’ll make adjustments , some of them quite easily.

CONS

• Time consuming: Unless you are extremely thorough, it can get tiresome to account for each expense at the time of purchase.
• Forgetfulness: Will you remember to accurately track each and every purchase? Really? Be honest.

Use Budgeting Software

There are plenty of options and tools made for individuals to stay financially responsible. It’s not just for large companies.

PROS

• It’s a snap: Budgeting software can keep a virtual log and deduct purchases from available income. There are even smartphone apps to simplify budgeting.
• Accuracy: Built-in calculators and automated alerts can track trends in your spending habits. It’s a lot easier than doing it in your head.

CONS

• Software for dummies: Some budgeting software and apps aren’t easily understood. They aren’t useful if you don’t understand the methods. It might require some training.

Refinancing Your Mortgage

If your home is underwater — you owe more than the home is actually worth — or if mortgage rates are especially low, this is a great debt-relief option. Do your research, find a trustworthy lender and go from there.

PROS

• It saves money: There are fees, of course, but by doing your own legwork, the cash that you’d pay a professional, stays in your own pocket.
• Great Education: Refinancing your home will give you a crash course in logistics, real estate and finances.

CONS

• It can drive you crazy: Exhaustive research. Endless phone calls. Aggravation. Are these exercises you generally try to avoid? If so, maybe it’s worth paying a professional.
• Paperwork Trail: The loan application includes a complete review of your finances and employment history. You must provide recent income tax returns, pay stubs, proof of checking and savings accounts, investment records and more. Again, if this doesn’t sound enjoyable

Renegotiate Your Credit Card Bill

You’d be surprised at the flexibility of some credit-card companies. They will negotiate terms on the interest rate you pay and might discuss a lump-sum payment to clear your debt. They are often motivated by getting SOMETHING, rather than nothing.

PROS

• Saving Money: By renegotiating your Annual Percentage Rate (APR), your monthly payment will be more affordable.
• I’m Easy: The negotiation doesn’t require knowing the right people or making an appointment. It begins by calling the toll-free phone number for your credit-card company. Talk to them. They might listen.

CONS

• The right information: You must know what to ask. Research your options. They might not lower your interest rate, but they might agree to a lump-sum settlement.
• The consequences: Before agreeing to a solution, you should have educated yourself on the consequences.