As the famous philosopher and poet Ralph Waldo Emerson once said: “A man in debt is so far a slave.”

Dealing with bad debt can feel stressful and overwhelming. However, not all debt is bad. In fact, having some debt can help you with such investments as getting a home, a college education, or starting a new business venture.

Many people, though, often fall into a pit of making irresponsible purchases using multiple credit cards. Interestingly, credit surveys show that the average American has a credit card balance of $6,354. And sometimes it’s out of your control, especially when unexpected life events happen like unplanned medical bills, a job loss, or a divorce.

debt md 4 great ways to break free from debt

Debt Free Living : 

Debt among Americans is alarmingly high – and it’s growing. Often, it’s because many individuals and families fail to assess the options available to them to resolve their debt.

There are many different ways to manage your debt , and here are four of your best options.

Debt Consolidation Loan

A consolidation loan is a great debt relief option because it helps you get a single loan that combines all your unsecured debts and rolls them into a single monthly payment. With a debt consolidation loan, you can make your monthly payments more manageable and possibly reduce the amount you’re paying in interest each month on your current debt.

Credit Counseling Service

Working with a professional credit counseling service can be a great option for you to get a clear picture of what’s available to help you through your financial troubles. An experienced credit counselor can help you examine your credit history, assess your budget, review alternative options for debt relief, and suggest solutions for your specific situation.

Debt Settlement

The debt settlement option allows you to negotiate with your creditors by reconciling a portion of your debt. Essentially, it means asking your lender to forgive a portion of what you owe. However, this option could come with a lot of risks. If you work with companies to deal with your creditors, they may charge you fees for their service that could ultimately cost you more than your original debt. In addition, using this option could have a negative impact on your credit score. This is usually true even if you’re successful during the debt settlement process.

Filing for Bankruptcy

Filing for bankruptcy is commonly seen as a last resort for borrowers with large amounts of debt. The bankruptcy option gives you a chance to start over – but it often comes with certain restrictions. If you do decide to go through with a bankruptcy, you usually have two options : A Chapter 7 or liquidation bankruptcy, or a Chapter 13. Where a Chapter 7 bankruptcy wipes out all your debts, a Chapter 13 bankruptcy allows you to set up a repayment plan for three to five years that will help you get rid of your debt.

While Chapter 7 claims to wipe out your debts, not all debts are eligible for this type of bankruptcy. These debts include child support, tax bills, and student loans. Yet in most cases, filing a bankruptcy lets you start fresh, get rid of credit cards, and rebuild your credit. The downside? A bankruptcy could stay on your credit report for up to 10 years. It can also can be an expensive process, so be sure it’s the right move before getting the ball rolling.