There are almost as many different types of consumer debt as there are ways to get into trouble with debt. For consumers like you, it is important to understand the various types of obligations that can increasingly devour our monthly take home pay.

Obviously, some obligations, such as credit card debt, can be anticipated and managed, other debts like medical bills are likely to take you by surprise. Understanding the types of debt you have translates into knowing the different type of options you have at your disposal.

Consumers and Types of Debt

As mentioned, there are a myriad of ways to accumulate debt and each type of consumer debt comes with its own solution. Whether you are looking at the need to file for bankruptcy protection, or you believe that a simple debt management plan will help, the types of debt you hold can be the difference in your course of action. Typical consumer debt types can include:

• Credit card debt
• Loan Debt – Student loans, auto loans, payday loans, etc.
• Tax Debt
• Medical Debt
• Mortgages Debt

Knowing the Differences Between Types of Debt

Knowing the differences between types of debts is the beginning of understanding what debt solutions are right for you and your family. Your resource for answers is standing by at Debt Advocates, debt resolution pros, so don’t wait another minute before seizing control of budget and debt problems.

It’s easy to get buried in credit card debt, especially if you’re not aware of how quickly it can happen. Once their regular income becomes stretched, many people naturally turn to their credit cards to bridge the gap left by a financial shortfall. Unfortunately, this debt strategy has only one outcome, and that can lead you scrambling to find help lowering your credit card debt.

Credit Card Debt and You

Owing to the high interest rates charged by credit card companies however, the accumulated payments can quickly dwarf your ability to meet your financial obligations. If you need help paying credit cards off, credit card counseling can be the first step in regaining control over your finances.

Credit Card Debt Options

When looking for help with credit card debt, you want to find a company that is not only well-versed in credit card negotiations, but also reputable and honest. To that end, you will want to keep your eyes open for warning signs that your credit counselor is more interested in collecting fees than lowering your debt. Such signs include but are not limited to:

• Charges you fees before settling any debts
• Guarantees they can remove unsecured debt
• Advocates “new” government programs to remove debt
• Says they can stop all collection efforts
• Advises you to stop paying bills

To buy the big things that we need in life, we sometimes find ourselves taking out loans to help us leverage our wages. As such, it is easy to ignore the threat that ongoing monthly payments on your loan obligations can easily eat up your monthly income. If loan debt is increasingly consuming a larger portion of your available income, you might want to find help with loan debt obligations.

One of the biggest loans that people are having problems with is student loans, which are nearly impossible to discharge like other consumer debts.

Avoiding Student Loan Problems

The key to success is education, and the first thing students need to learn is their responsibility regarding their student loan obligations. While it is easy to go overboard and apply for more loan money than you probably need, make sure you also consider finding a part time job, cutting expenses, or a combination of the two. If you do decide to take out a loan, consider the following:

• Understand your loan and repayment agreement
• Manage your borrowing habits
• Track your loans
• Keep excellent records
• Stay in contact with your loan servicer

When it comes to money and debt collection, perhaps no set of initials inspires a more nervous response than receiving a notice from the I.R.S. Probably due to their early success in nabbing reputed gangster, Al Capone, the agency has cemented its reputation for efficiency in going after tax scofflaws.

If you have run afoul of an IRS audit, or owe back taxes that threaten to ruin you financially, you need to get help with the tax debt before the situation overwhelms your finances. If you find yourself in trouble with tax officials, you have several options available to you to make it right with Uncle Sam.

Tax Relief Solutions

As with all debts, avoiding your creditors is generally a mistake, and that is no truer than when the creditor is the United States government. Reaching out to the I.R.S. provides an opportunity to negotiate with the government to settle your debt obligation. Consider the following:

• Entering into an installment agreement
• Entering into a partial payment agreement
• Potentially settle the debt for less than you owe
• Filing for Bankruptcy

Owing the Internal Revenue Service is never a good idea, so getting help with tax debt is an important first step.

A sad byproduct of our broken healthcare system is the numbers of people forced to file for bankruptcy protection for medical debt. It is estimated that more than 600,000 Americans are forced to file for protection under the nation’s bankruptcy code each year because of mounting medical bills.

So if you need help with medical debt, you can rest assured that you are not alone in this problem. Medical emergencies can come out of nowhere, and their financial impact can last long past the actual illness, even with insurance. If you need a plan to get out of your healthcare-inspired financial hole, you should work with a debt counseling professional to help gain control over your finances.

Organizing an Avalanche of Medical Debt

Medical bills are as much a physical presence as a looming financial crisis. Indeed, you don’t need to be told that the number of bills only increases as you slip towards default. Organizing this paper trail is the first step before meeting with a credit counselor for help with those mounting medical bills. Some considerations:

• As bills arrive, place them in a file marked as unpaid.
• You will want to pair this with insurance documentation as it applies.
• Match original bills with Explanation of Benefits and file in EOB file
• Once the insurance company pays the bill, place it in a settled file.

There is no bigger investment in our lives than owning a home. Beyond the financial aspects of the purchase however, your home represents all that is important in your life as the shelter for you and your family. When your home is threatened, the problem is as much visceral as it is financial. Propelled by such urgency, it is easy to feel as if your world is slipping out of your grasp as your mortgage ticks further towards default.

Luckily, you do not necessarily need to lose your home if you act proactively by getting ahead of your mortgage debt. From refinancing old obligations to cutting down on new debts, gaining control of your finances is the beginning of managing your mortgage debt.

Getting Mortgage Debt Under Control

There are a myriad of debt strategies available for homeowners looking to save their home, or failing that, their credit rating. These include:

• Forbearance—an option if your income has been temporarily disrupted. It allows you to reduce or suspend your mortgage period for a set amount of time. Repayment can come either in the form of small additional payments, or a lump sum payment at the end of the loan.
• Loan Modification—has the potential to make your payments more manageable.
• Chapter 13 Bankruptcy—offers a chance to reorganize your debt while keeping your property.

We would all like to get rid of some of that debt that seems to dog our credit reports and interrupt our sleep patterns. Indeed, while lying there awake and stressed in the middle of the night, we have all watched those late night commercials promising to eliminate our outstanding debts. To reduce debt seems like it might be the ideal way to reclaim our lives.

But what is debt reduction? How does it work? Is it the right debt solution for your financial circumstances? Let us look at the main factors that you should consider before beginning a debt relief strategy.

Take Control of Your Finances with Debt Reduction

Debt reduction help can take many forms, but the best program of debt relief puts you at the center of the action when it comes to cleaning up your debt and credit reports. As such, devising a debt repayment program begins:

• Taking stock of overall debt
• Determine how much you can afford to pay
• Call your creditors
• Target highest interest bills
• Map out a payment plan
• Break the debt cycle