If you have a high credit score and a small amount of debt, you should consider a simple form of debt consolidation. Open a credit card with a zero percent interest rate for at least 12 months. Then, transfer all your current credit card balances to this account and begin paying off the debt. Put as much money as you can toward the balance and try to have it paid off within a year. Try to avoid opening new accounts and transferring your debt often because it will start to impact your credit rating and lenders will take notice of it. They will recognize that you do this often and they will stop granting you credit. When you do open a credit card to transfer balances, find out if there is a balance transfer fee. Depending upon the credit card, the transfer fee may cost you more than the amount you pay in interest fees to your current creditor.

Another option to consolidate debt is to open up a second mortgage. A second mortgage is called a home equity loan and you will receive a lower interest rate from the bank. You will need to pay some up-front fees for opening the account. A home equity loan is usually pretty easy to obtain, but you do need to front some collateral to open the loan. The collateral will be your home, so if you default on the loan, the bank has the right to repossess your home. Usually a home equity loan comes with a simple re-payment plan, making it easy for you to adjust the payment amount to your monthly needs. The downside to a home equity loan is that a lot of people take advantage of the leisurely repayment schedule and they make small payments and wind up opening other credit cards and getting into more debt. You need to have self control if you open up a home equity loan and make sure you are paying as much as you can toward the loan each month.

When people get into a financial bind, they will turn to their family members and friends for help. If you have a family member or friend that is willing to lend you the money, you better make sure you pay them back in a timely manner. Do not take advantage of their help by opening new accounts and getting into more debt. Each month, pay them a predetermined amount and try to pay a little extra to them each month. Lending money to your friends and family members can be complicated and it can destroy your relationship. Make a formal agreement and put it in writing. Keep a ledger of how much money you will pay to them each month and pay it on the same date each month. If there will be an interest fee on the money you borrow; this is even more of a motivation to pay off the debt sooner.

Debt consolidation companies are another great option for individuals that are truly in a bind. They will work with your creditors to get you a lower interest rate and they will consolidate all your debt into one low monthly payment. A debt consolidation loan can really help you out if you struggle with paying each of your lenders individually each month and if you cannot afford to pay each lender each month. The debt consolidation company will review your current financial situation and they will arrange a payment amount that fits your needs. Using a debt consolidation company can save you from being in debt for 10 to 20 years. Most individuals that use a debt consolidation company are able to pay back their debt in about 5 years.

Using a debt consolidation company does come with some disadvantages. First, you need to shop around to find the best debt consolidation company. There are many debt consolidation companies that take advantage of people by charging them high interest rates. You could end up paying more money over the life of the loan than you would pay if you were to pay off your creditors individually. When you are shopping for a debt consolidation company, always seek out a nonprofit company. They usually offer lower interest rates and lower monthly payment amounts.

Second, always check out the reputation of the debt consolidation company before you enroll in their service. Some debt consolidation companies will charge you an upfront fee to join and they will not disperse that money to your creditors. This will cause you to have missed payments with your creditors and this can really hurt your credit score.

Third, add up how much money you are paying to each of your creditors and compare it to the amount the debt consolidation company wants to charge you. You may find that you will actually pay more money to the debt consolidation company than you would pay to each of your creditors on your own.

Fourth, order a copy of your credit report and score and find out where you are at. Once you know your credit standing, it will be easier to determine what types of loans and interest rates you qualify for. Some debt consolidation companies will charge you higher interest fees if you have a poor credit rating.

If using a debt consolidation company doesn't seem right for you, take a look at your retirement funds and your life insurance. Can you pull some money out of your retirement fund early or can you afford to contribute a smaller amount? Even though pulling money out of your retirement account is not a smart idea, it could be your only option next to bankruptcy. Depending upon the type of retirement account you have, you will need to pay back the money within 5 years or else you will be charged a fee from the IRS. Some life insurance policies also let you borrow money. A whole life insurance policy will allow you to borrow against its value and you don't have a set time limit to pay back the money. If you choose not to pay back the money at all, it will be deducted from the benefits that are paid to your beneficiaries if you were to pass away.

Before you consider any of the above options, call each of your creditors or lenders individually. Tell them about your current situation and ask them for help. Some lenders will be able to reduce your interest rates if you promise to pay back the amount you borrowed within a designated time frame. Most lenders would prefer to negotiate with you to create a structured payment plan rather than come after your property or other assets.

Consolidating your debt will take discipline and time. You need to create a monthly budget and stick to it. Pay as much money as you can towards your debt to get out of it sooner. Lock up the credit cards and stop using them entirely until you have paid them off. If you can't control your spending, seek the advice of a financial consultant. They will be able to create a monthly budget for you and they can help you stay on the right track.