While it may feel as if the economy is getting better there are still a number of people that are buried in debt. Yes, getting into debt can happen from simply spending more than what you earn. But quite often the root of the problem is deeper than that. Getting into debt can happen as a result of poor financial planning, job loss, a serious illness or a lost business. If you are one of the many people struggling with your finances and want to get rid of your debt so that you can enjoy your life again, here are some options for you to consider.

Refinance Your Mortgage

If you own a home and you have significant equity in your home, you could consider refinancing your mortgage.

This will benefit you if current interest rates are lower than what you are paying now. By refinancing you can apply for a shorter amortization period to pay off your mortgage quicker, and if your interest rate is lower, more of your payment will be applied towards your outstanding balance instead of simply paying off the interest portion.

If you are also carrying consumer debt or paying off other loans look for ways to include your existing debt into your new mortgage.

By doing this you will only have to worry about one payment each month, instead of mortgage payments and other debt payments, such as credit cards. And, the interest rate on your mortgage will be significantly lower than the interest rate on your credit cards.

Keep in mind that if you refinance your mortgage and include other existing debt as well, the only way you will be successful in getting rid of your debt is by making sure that you immediately stop using any credit cards, and do not apply for any other new loans.

Investigate Consolidating Your Debt

If you have debt but you also still have an income, debt consolidation is an option that you should investigate. The way it works is that you apply for one large loan and you use the money you receive to pay off all of the other debts that you have.

For this to work well, you need to obtain a loan with a lower interest rate then what you are currently paying on your existing debt.

As well, you need to make sure that the money you receive is in fact used to pay off your existing debt and not a shopping spree.

Once you have completed that you will find it easier to manage your debt because you will only have to repay one loan each month instead of several. And your monthly payments will typically be lower which will allow you to put extra cash into savings.

If you go this route, make sure you are very self-disciplined.

Stop using any credit cards that you have and do not apply for any new loans, and soon you will be debt free.

Filing Bankruptcy

You will always hear people say that filing for bankruptcy should be your last resort. This really depends on how serious your situation is, and how old you are.

I am not saying that every time you have some debt you should consider doing this. But if you are hundreds of thousands of dollars in debt, for whatever reason, and you know it will take years to repay, you may want to investigate this option soon.

As well, if you are seriously in debt and close to retirement age, now is the time to get rid of this debt, so that you can move into your retirement phase debt free.

The last thing you want is to be on a fixed income and still have to worry about allocating enough money towards debt repayment every month.

I know people make it sound like declaring bankruptcy is completely the wrong thing to do, and that it will ruin your life forever. Fortunately that is not the case.

Before you say yes or no to this option do some investigating. Investigating this option doesn’t mean getting advice from friends and family.

It means that you should speak to financial experts or a bankruptcy lawyer or trustee to find out exactly how it works.

Setup a meeting and go in with a list of questions, such as how many assets will you sacrifice, will you still owe money, and if so, how much, and how long will the entire process take.

People who have declared bankruptcy have said that it is the best thing they have ever done.

The stress of being in debt and having to deal with it on a daily basis was literally killing them. And no one needs to live that way.

But once they completed their bankruptcy and their debts were written off they were free to start over again, on a level playing field.

They were able to save their income, follow a budget and begin enjoying life again.

Getting rid of your debt is possible. How long it takes will depend on your current situation and what you choose to do to make it happen. Stop stressing about your debt and start working on it.