Decreasing your debt is paramount to having a good credit rating as well as giving you peace of mind. You want to get out of debt, but not all debt reduction options may be beneficial. Lets take a look at five debt reduction options which may help you in your quest to get out of debt.

1. Consolidate Loans. Before declaring bankruptcy, consider pulling together all of your outstanding loans into one low monthly payment. Loan consolidators can help you come up with a plan to pay off all of your debt while maintaining your credit standing. Bankruptcy, unfortunately, ruins your credit rating while a consolidation loan may help you save it.

2. Your Life Insurance Policy. Your life insurance policy may have a cash value to it. Consider taking the cash from the policy and using it to pay off or lower your debt. Of course, your payout will be much lower upon your death; make sure your loved ones are adequately provided for when you have released this mortal coil.

3. Federal Loans. Government loan programs local, state, and federal may be available to you and at a rate much lower than what you currently pay your creditors. Check out loan programs, which you must pay back; as well as grants, which are gifts to you to see what your eligibility is.

4. Borrow From Your 401(k). If your company has contributory retirement plans such as a 401(k) or 403(b), you can take out a low interest rate loan and use the proceeds to pay off what you owe. You are borrowing from your retirement account so your loan must be paid back; if you do not pay it back you will incur IRS taxes and penalties. Still, the borrowing rates are quite reasonable.

5. Bankruptcy. The U.S. constitution gives Americans the right to discharge debt, and it is one option some must take in order to get creditors off of their backs. With medical expenses surging, gas prices hitting record high levels, and many other expenses increasing, bankruptcy may be your only choice to help protect your assets from overreaching creditors..

Obviously, some of these options have different consequences than others like a ruined credit standing still, when your back is to the wall your choices are extremely limited. Find your comfort level and choose an option that is right for you.

Matthew Keegan

If you are looking for a successful and prolific article writer, than Matt Keegan is the man for you. As The Article Writer, Matt writes on a variety of topics including advocacy, automobiles, aviation, business, Christian themes, family, news, product reviews, travel, writing, and more. At present, Matt is a top ten writer on this site and a frequent contributor.

Matt writes web site content, ezine distribution [article marketing/SEO], for newsletters, and for print material. His speciality is topical writing.

In addition, Matt is the owner of a successful web design and marketing company based in North Carolina, USA. Matt manages several sites including two high performing business aviation sites: the Corporate Flight Attendant Community and the Aviation Employment Board.