Being in debt can be stressful, especially if you are in way over your head. It is important to understand you need to develop a debt management plan of attack to avoid going into bankruptcy. Bankruptcy will follow you for the rest of your life and make at least the next ten years very rough to get ahead financially. As you're dealing with your debt problems you need to take a serious look at your spending habits. Quite often people will have enough income to live on but they can't quite control the use of their credit cards and spend way beyond their means. This is often referred to as a champagne appetite with a beer budget.

It is important to understand that credit cards where not designed to get you out of debt and with the high interest rates they are charging they will actually get you into more debt. Depending on your situation you may be seeking debt counseling or already in a position of trying to understand the different aspects of debt negotiation. A debt consolidation loan maybe just the relief you're looking for. They allow you to combine all your debt into one loan and one payment. There are several types of debt consolidation loans.

One is a secured consolidation loan in which the outstanding debt is secured by assets you have such as property or a house, typically this type of loan has a lower interest rate since the loaner has the ability to claim your asset in the event you don't make the loan payments. Another type of debt consolidation loan is an unsecured loan. This type of consolidation loan will come with a higher interest rate since there are no assets securing the loan making it riskier for the loaner to get their money back in the event you don't make the payments. Quite often with the rising home values a home owner will refinance their mortgage and consolidate their other debts into the mortgage. Quite often you will see home owners roll their car payments in to their refinanced mortgage allowing the car payment to go away and only a small increase in their mortgage payment. There is a dark side to consider when doing this, typically a car loan last for 5 years, when you roll this into your mortgage the term is usually 30 years.

This means that you will be actually paying for the outstanding car loan balance for the next 30 years. You may be in a debt situation where this is the only answer but if not you need to consider carefully what you consolidate into a 30 year payment. Lastly, there are many variables and options you need to consider as you start your debt management plan. Be sure to read the fine print of any agreement you are considering, most lending institutions are trust worthy but just to be sure read all the fine print so you are not surprised by a higher payment than you thought or some other penalty you may not have been aware of.

Jeff Kimball is an independent business writer and webmaster of Good-Debt-Consolidation-Loans.com