Many Americans are straddled with credit card debt, replicating the national debt crisis within individual households. Paying off monthly credit card bills has become difficult as wages stagnant and the cost of living continues to rise. For some, undisciplined spending habits also exacerbate financial problems. 

You are not alone in high credit card debt, and you do not have to find a solution alone. Debt relief solutions are available.

Simply recognizing a financial crisis is the first step. The next step involves selecting a viable plan to become debt free. Below is a description of six top debt relief solutions. This can help to select which solution works best for your budget. With the right choice, you can pay for living expenses and pay off debt.

1. Mortgage Refinance

If you currently own your home, you may qualify for a mortgage refinance program. This will enable you to consolidate several bills into one monthly payment. Using a mortgage refinance as a debt consolidation tool is a good plan if you do not add more credit card debt. With a mortgage refinance loan, you could possibly lower the interest rate, reducing the overall costs of repaying the debt. Keep in mind, however, that a mortgage refinance loan is typically for homeowners with good or perfect credit.


2. Minimum Credit Card Payments

Simply making the minimum credit card payment each month is possible, but not the best strategy to pay off credit card debt. You are able to keep your account current and avoid late fees. However, this is a lengthy process and increases the lifetime costs of paying your debt. Making the minimum payment on high interest rates and credit card balances keeps you in debt.


3. Credit Counseling

Credit counseling is a practical solution if you have serious debt problems, i.e. default accounts or collection agency activity. A credit counselor conducts a detailed review of your financial situation based on monthly income to financial obligation ratio.

In some cases, a credit counselor is able to lower your interest rate and monthly payments with creditor. Commonly known as a debt management plan, you make one monthly payment to a credit counseling company. Your assigned credit counselor distributes portions of the payment to your creditors. Under this type of program, you repay your debts with smaller, manageable monthly payments. Depending on your total debt, this program could take up to five years to complete.


4. Debt Settlement

Debt settlement programs are similar to a debt management program. The primary difference is that you negotiate and pay off your debts for a lesser amount. For example, if you owe $1,000 to a credit card company, you can offer to repay 70 percent, or $700. Once the $700 is repaid, your account is noted as paid in full.

Another difference is that you do not remain current on the debt while participating in a debt settlement program. This can negatively impact your credit rating and collection calls may continue. You have a higher chance of success by working with an accredited and experienced debt settlement provider.


5. Chapter 7

Filing for bankruptcy should be a last resort. Still, this could be a viable option if you cannot manage to repay your debt through any other means. 

A Chapter 7 is a way to liquidate your assets. The proceeds are distributed to creditors. You receive a discharge and are no longer obligated to repay your creditors. This can negatively impact your credit profile for at least seven years.


6. Chapter 13

A Chapter 13 allows you to reorganize your debt and repay it in three to five years. You must have a reasonable income to qualify.