10k and Deeper

Being in debt can feel like a real burden. If you owe more than $10k in credit card debt, the situation may seem hopeless. Every month, your debt grows bigger and bigger. If you're having trouble keeping up with the payments, you may want to consider one of the following options:

• Debt consolidation – With debt consolidation, you take out a single low-interest loan and use that money to pay off your expensive credit card debt. You can either apply for the loan yourself or go through a company that specializes in debt consolidation. In theory, consolidation can save you money. However, the only way it will work is I you qualify for a good rate on the loan. Also, don't forget to include all of the fees in your calculations. Some companies charge hundreds of dollars to consolidate your debt on your behalf.

• Debt settlement – If you're certain that there's no way that you'll ever pay off your credit card debt, consider debt settlement as an option. With debt settlement, you negotiate with your creditors to reduce the amount you owe. You can also propose a new payment schedule that you can afford. The main downside to debt settlement is that it ruins your credit score, though if you're this much in debt, chances are that your score is already pretty low. Also, you'll have to pay income tax on the "forgiven" debt.

• Talk to the credit card company – Before you consider either of the above options, you may want to talk to the credit card company and explain your situation. Lenders are aware of the current economic situation and may be willing to listen to you. In some cases, they may reduce your interest rate or lower the minimum monthly payment, giving you a chance to get your head above water.