- 1). Communicate with your creditors to explain your financial situation and see what options they have for you. Some creditors will agree to greatly decrease your overall debt if you can make a lump-sum payment, and others have hardship programs that can freeze your interest charges and overall amount due for a set period of time while you get back on your feet.
- 2). Save up enough funds to cover at least 35 to 40 percent of the debt owed to a particular creditor. Call the creditor and offer to pay that percentage in a lump sum immediately on the condition that the remainder of your debt is forgiven. Many creditors will accept the offer or will offer a counter to it.
- 3). Consult a credit counseling firm. They will give you a consultation and assist you in figuring out your income compared to your debts and expenses. They can also negotiate with your creditors to lower your interest rates and fees and consolidate your debts into a single monthly payment.
- 4). Discuss your case with a debt settlement firm. They operate by instructing you to stop all payments to creditors, and then they try to negotiate settlements for you as you are saving up money to make the payment that they negotiate. This will void any credit counseling agreements, so don't go this route unless the credit counseling is not working for you.
- 5). Ask family members for loans that can enable you to pay off your debts. Then, you can pay them back at lower interest rates without the damage to your credit scores. Only do this if you have a realistic plan for paying them back, though.
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