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Many people feel smothered by debt. While climbing out of a huge debt may seem impossible, it can be done. However, some people cannot manage the process alone. While there are people who are in debt due to job losses or illness, there are many more who are in debt because they don't know how to manage their finances well. For these people, it is difficult to know how to begin the process of getting out of debt, much less how to continue it to a successful conclusion. For these consumers, having an advisor create a feasible debt management plan is the first step in getting rid of debt permanently.

Minimum Payments

First, consider the most common debt reduction strategy used by individuals who try to solve their debt crisis alone. Their plan is usually to make the minimum payment on each debt each month, assuming that this will eventually get rid of the problem. However, consider that a 10,000 debt at 15 percent with a $175 minimum payment each month will take 144 months or 12 years to pay off. Most people in this situation have more than one debt, compounding the difficulty of paying debts off. Additionally, people in this situation often add to their debt by making additional credit purchases rather than reducing their obligations.

Debt Settlement Programs

Debt settlement companies generally promise they can negotiate one-time agreements with creditors that will write off much of a person's debt, thereby dramatically lowering monthly payments. But few, if any, creditors participate in these kinds of settlements, so consumers pay an upfront fee and get no debt reduction. Some of these companies call themselves non-profit organizations so that they sound legitimate. However, simply having non-profit in the name does not mean a debt settlement company is not using clients to make money. Many such companies are concerned only with having clients begin the program and pay fees, not with having clients successfully finish the program.

Credit Counseling Agencies

Debtors are sometimes lured into agreements with credit counseling agencies. While some agencies are ethical, many such companies are not. These companies promise to combine all payments into one payment collected by the agency, while the agency promises to make all credit payments on the debtor's behalf. However, these agencies may charge an initial, upfront fee then never provide any services, or they may tell the debtor they are paying the bills, but never make payments. Debtors using these kinds of services run the risk of late fees, higher interest rates, negative records on credit reports and the loss of fees.

Debt Management Companies

For people with large amounts of debt who need help overcoming the problem, a debt management plan through a reputable agency or financial advisor is often the best method for becoming debt-free. Debt management advisors will help the debtor work with credit agencies and develop payment plans. Good advisors will show clients how to cut credit spending, create a manageable payment plan, pay off high-interest loans first, and keep credit ratings intact when possible. These plans can help provide the discipline it requires to become truly debt-free.

While there is no magic fix to credit problems, debt relief is possible with the right planning and good discipline. The first step in getting rid of debt is to honestly assess how much is truly owed. Once a person faces the truth, debtors can begin an aggressive plan to reduce that debt until it is gone. For many debtors, a debt management company can provide the structure, discipline and know-how to make debt-reduction successful.