There are many ways you can eliminate debt but not each method will work for each person. Before you begin your debt elimination journey it is important that you understand your unique financial situation before employing a debt elimination method. Each method of eliminating debt- from the snowball method to bankruptcy has it's own process and is geared toward individuals in specific financial circumstances. By using the following guideline you can determine which method is more likely to help you eliminate your debt with the least amount of negative consequences.

• Snowball method- The snowball method is very popular among people who have the means and resources available to aggressively tackle their debt on their own. By avoiding third party companies you retain control of the process and eliminate not only your debt but the chances of wasting money on unnecessary fees for services. The snowball method in a nutshell is simply listing all of your debts from highest interest rate or lowest balance and starting with the first on your list and making aggressive payments to eliminate the debt. By aggressive, this means you have to have not only the minimum payment but also apply all disposable income toward your debt. You will maintain minimum payments on your other accounts until the first account on your list is paid off, then switch your attention to the next account on your list. Continue doing so until all debts are paid off. This is the best method of eliminating debt on your own and will not harm your credit in the process. It may take several months or maybe even a few years depending on your level of debt and the resources available for debt repayment, however when you are finished you will know you paid all your financial obligations in full and are free from debt.
• Credit counseling and consolidating debt- If you have some resources available but need a little help getting organized you may qualify for credit counseling and/or debt consolidation. By employing the help of an outside agency, you will have the benefit of counselors helping you get your finances in order as well as working with your creditors to lower interest rates and waive fees. This process could have a negative impact on your credit however when done properly it can help you eliminate your debt by having more of your monthly payment applied to the principle balance versus interest charges and fees. When working with a credit counseling agency you will make your monthly payment to the agency who will then distribute payments to each creditor. As with all debt relief options, there are pros and cons which you should be aware of to avoid entering a program that will do more harm than good in the long run.
• Debt Settlement and Bankruptcy- By far the strongest medicine out there for consumers struggling with debt. Debt settlement is one option that you may consider before filing for bankruptcy as it has fewer negative consequences socially as well as financially. That being said, it is something that should not be considered by any person who can either repay their debt on their own or who can manage a structured payment plan. Both methods involve some level of debt forgiveness with debt settlement carrying a bit more risk as there are no guarantees with this method. If you are able to get some money together for one lump sum payment to your creditors debt settlement may work for you, otherwise your best option may be filing for bankruptcy.

Any time you opt to enlist the help of a third party organization, it is imperative you carefully research the process and the company providing the service. There are many companies emerging as a result of the recession making it possible to choose a company that does not have your best interest at heart. Whenever possible eliminating your debt on your own terms is the best method and should be considered by those with the resources to pay down debt on their own. If that is not possible, understand what you are capable of paying and when to ensure you pick the best method for your situation.

Debbie Dragon is a freelance writer providing articles for Billeater.com, a site that helps it's readers save money, with unique money saving tips and tricks for your busy lifestyle.