The need for debt reduction is as common as dieting and attempting to break bad habits. When debt becomes a burden too large to carry, the need to not only get out of debt, but also prevent slipping back into the same spending habits is critical. If this pertains to you, read on.

Look for Errors, Make Deals and then Consolidate.

Start by taking an inventory of all of your debt. Download or send for your credit reports and look them over very carefully. If you find there are errors on your report, such as debt that has been cleared but has not been taken off your report or charges for items or services that you did not purchase, make some phone calls to get them cleared away.

Try to settle smaller debt and lower your monthly payments. Offer what you can pay and not what the balance shows. Often, creditors will be happy to get what they can rather than lose all the money. Remember to get an agreement in writing before you send them money. When creditors give you a difficult time despite the fact that you are being proactive in avoiding bankruptcy, just step back and get ready for the next phase.

Loan consolidation is a valid option. Doing a loan consolidation with a new loan will require decent credit scores, so if your debt is beyond a certain ratio, or your scores are too low, you may need to consider the alternative - debt reduction plans. These consolidate all your credit cards, negotiate payment plans and interest rates with the creditors, and work on your behalf to lower your debt. They usually charge a small start up fee, and add a low monthly fee to remain in business. However, the benefit is you are still paying far less, both monthly and in the long run, to meet financial obligations.

If all the above still has you stretched beyond capacity, there are other things to consider. Taking a second job, shutting off the unnecessary luxuries, (such as HBO or kids cell phones), writing down a budget - and analyze every dime being spent. Cutting up credit cards and being frugal in shopping are other ways in which expenses can be cut dramatically. Make a consistent attempt to pay more than minimum on any loans, and pay off the smaller debts first. Do not declare bankruptcy unless it cannot be avoided.