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If you are mired in debt and do not know where to turn, you are not alone. Millions in today’s troubled economic climate are struggling and in need of debt relief. There are alternatives, and understanding your choices can give you a head-start in solving your problems.

Credit counseling is a service offered by agencies who work with your creditors directly to negotiate a lower minimum monthly payment. After discussing your situation in depth and gathering the needed data, a counselor for a credit counseling agency will try to get creditors to decrease your payments. This is at best a temporary measure and may not be sufficient.

Debt settlement is another service that involves the use of a person trained to deal with creditors. The counselor will attempt to negotiate reduced payoff amounts with your creditors and reach an agreement on a shortened payoff period for your debts. Settlement can have an adverse effect on your credit score, but may be effective in some cases.

The most adverse effect on the credit score comes from bankruptcy, but it is also the only option for many who have crippling debt with no chance of payoff. In this process, your debts are canceled after a relatively lengthy procedure which usually involves an attorney. The main advantage to bankruptcy is of course that the debtor gets a clean slate and a fresh start.

Making minimum payments on your debts is like being on a treadmill in that not much if any progress is really made, because you are not paying down the principal but only the interest. Every month is basically the same and unless there is a change in income or other circumstances, the amount of debt will continue to grow.