Debt Consolidation

A Basic Guide to Handle your Debt

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How to Handle your Debt?

thinking about debt management
thinking about debt management

Millions of Americans struggle with debt. Student loans, credit cards, and medical bills are the top three culprits of financial struggle in the United States of America today.

Although everyone’s debt is different the stress is similar. Read here on the top causes of debt

3 Ways on How to Handle Debt

No matter what type or amount of debt you are in, we understand that you want to get rid of it as quickly as possible.

So what options do you have to eliminate your debt? Here is a quick overview of the top three ways to handle your debt:

1. Bankruptcy

bankruptcy filing petition
bankruptcy filing petition

Filing bankruptcy is one way you can reduce or even eliminate your debt. In case you did not know, bankruptcy is an act which governs a law that allows U.S. citizens to get out of debt.

There are two main types of personal bankruptcy:

  • Chapter 7 –┬áThis type of bankruptcy most beneficial to individuals or families with high amounts of unsecured debt (credit cards, medical bills). This also covers low amounts of assets (paid in full homes or vehicles). Chapter 7 can eliminate most types of unsecured debt and give the debtor a fresh start.
  • Chapter 13 –┬áThis type of bankruptcy involves a 3-5 year repayment plan. With Chapter 13, the court allows the debtor to pay back a percentage of their overall unsecured debt. This type of personal bankruptcy is best for individuals or families with high sources of income.

2. Debt Settlement

erasing debt from chalk board
erasing debt from chalkboard

Before the debt negotiations begin, there is typically a period where the debtor asks the client to deposit money into a new savings account. The new account is exclusively for loan consolidation purposes only. Many debt settlements or loan consolidation companies do not require payment until the process is complete.

This is an up and coming form of debt relief that many are finding to be effective. The purpose of a debt settlement or loan consolidation program is to negotiate the debtor’s account balances. The debt negotiator’s job is to lower the amount in an effort to eventually ‘settle’ the account altogether.

The main difference in debt settlement and bankruptcy is that the lenders are not obliged to agree to any sort of reduction in a settlement program, but the court orders a bankruptcy nonetheless.

3. Credit Counseling

This may be the lesser known of the three options on how to handle debt. Nevertheless, it is still effective for treating some debt situations.

In a credit counseling program, the debtor pays a financial advisor to evaluate their situation for them. These advisors have decades of experience in the Financing industry and just enjoy helping people use their money wisely.

The great thing about all three of these options on how to handle debt is they are all popular you can find information on them online (such as here in Citrus North).


Don’t let your debt drown you. Here in Citrus North, we will help you how to handle debt. There are a variety of options and you just need to find the right one for you. Having said that, we offer a wide variety of financial options and solutions.

In fact, many bankruptcy attorneys, debt settlement firms, loan consolidation companies, and credit counseling companies even offer free initial consultations.