Personal debt is an issue in the forefront of many consumers\’ minds these days as the average household supports about $23,000 in personal debt. That includes personal loans, auto and student loans, medial debt as well as credit card debt. In a tight economy, people are looking for ways to do away with these debts.

Until recently, most creditors were unwilling to negotiate debts. There was little motivation to drop interest rates or balances on credit cards. Student loans enjoy a legal protection that gives creditors virtually no incentive to negotiate them, and auto loan debts are typically not negotiated because they\’re secured debts, which means the lender would just simply reposes the vehicle.

Credit card debt has come under increasing scrutiny, both by lawmakers and consumers. Recently enacted legislation changes the way credit card companies like American Express can assess debt and process payments, changes that favor the cardholder. Unfortunately, these changes won\’t take effect until July 1, 2010. In the mean time, consumers will have to pay their credit card debts following the old rules.

When carrying more than $10,000 in credit card debts, the minimum payments can be staggering, sometimes rivaling a mortgage or auto payment. Consumers who carry a balance are typically at the mercy of credit card companies when the issuers change the cardholder agreement. The only way out of the new terms, in most cases, is to pay off the balance and then cancel the account.

The $10,000 debt load is more than just a psychological milestone. For most consumers, it indicates a serious problem with their finances. Most consumers can\’t pay back unsecured debt at this level, especially when these balances may carry interest rates of as much as 30 percent per year.

When credit card balances exceed $10,000, and consumers are unable to afford to make the minimum payments on their accounts, some are now considering alternatives. Depending upon their circumstances, consumers are finding it beneficial to consider credit counseling, debt consolidation or even debt relief. Depending on the situation, many are finding credit counseling, debt consolidation and debt settlement as a part of a larger strategy to help them get on top of not only credit card debts, but also other debts including unpaid medical bills and unsecured loans that may be destabilizing their finances.

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