Few aspects of your financial life are as important as managing debt. Too much debt can feel suffocating. It can make it difficult to save, invest and even pay your bills, potentially affecting your financial future—and in many cases, your mental health. Yet breaking the cycle of debt is possible with the right strategies, trusted support and a commitment to taking small steps forward. This guide can help you build a path to financial freedom.

Before you can dig out of debt, you need to know how deeply you are in debt. Start by listing balances, interest rates and due dates for your debts, including credit cards, medical debt, student loans and personal loans. Then determine if you can realistically handle the monthly payments on every loan. These do-it-yourself steps can get you started:

Create a budget. Write down your monthly take-home pay, fixed expenses and variable expenses. Include all debt payments. Having all the numbers in one place may help you see ways to free up money for debt payments. Look first at spending on “wants”—entertainment, trendy clothing or eating out, for example—that you can do without.

If you’re struggling to make payments on your debt, you may want to consult a credit counselor. Counselors typically work for nonprofit agencies and charge no or low fees. They can help you set up a debt management plan and negotiate with your creditors to come up with monthly payments you can afford. Then you make a single payment to the counseling agency, which divides the money among your creditors. As long as you’re on a debt management plan—typically four or more years—many credit card companies will lower your interest rate, waive late fees and hold off on debt collection. Generally, you’ll be allowed to keep one credit card for emergencies. To ensure you don’t take on additional debt, you may have to close any other credit card accounts and may not be able to open new ones or get approved for new loans while on the program.

Creditors want you to repay your debt, and some are willing to negotiate to make it easier for you to do so. For example, hospitals and other medical providers may allow you to pay your bills in monthly interest-free installments or may accept less than the billed amount if you offer a lump-sum payment. Some credit card companies may waive fees or lower your minimum payment or interest rate. Creditors are likely to be more amenable to negotiations if you contact them directly.

Debt consolidation is combining multiple debts, such as balances on several credit cards, into a single new loan. You’ll have fewer bills to track and may end up with a lower monthly payment. It’s important to remember that you can’t borrow your way out of debt. For debt consolidation to work, you must make on-time payments and be careful not to take on new debt. Different types of loans can be used to consolidate debt, each with pros and cons. In every case, review the interest rate and any fees, and be sure you can make the monthly payments. Loans to consider include:

• Credit card balance transfer

  If your credit is good, you may be eligible to transfer balances to a credit card that offers an introductory or promotional rate as low as 0%. This option works best if you can pay off the balance before the promotional period ends and the interest rate goes up. Keep in mind that late or missed payments may cause a significant increase in the interest rate.

• Personal loan

  This is a type of installment loan from a bank or other lender. It can be a quick way to get a lump sum of cash, but you’re committing to fixed monthly payments for several years.

• Home equity line of credit or home equity loan

  These loans are based on your home’s equity—the difference between the home’s appraised value and the balance of your mortgage—and use your home as collateral. If you default on payments, the lender could foreclose on your home.

• 401(k) loan

  Your company may allow you to borrow from your 401(k), but that generally is not recommended. If you leave your job before repaying the loan, you may have to pay income taxes and an early withdrawal penalty. And you’ll miss out on potential investment earnings, which could cut into your retirement savings.

If you have student loans, you may be able to reduce your monthly payment by consolidating them into a single loan. But there are tradeoffs. The new loan will have a longer repayment period, which means your total interest cost will be higher unless you’re able to pay off the new loan early. And you may no longer be eligible for government protections like student debt cancellations or payment suspensions. The Federal Student Aid website has tools and information to help you decide if consolidation is right for you.

For-profit debt settlement or debt relief companies promise to reduce debt for a fee. The companies attempt to negotiate settlements with your creditors. They require you to make monthly contributions to an account they set up until there’s enough money to cover negotiated settlements and their fees. This process can take years. During that time, the companies typically tell you to stop paying creditors to pressure them to settle.

The Federal Trade Commission (FTC) and Consumer Financial Protection Bureau warn that programs offered by for-profit companies can be risky. Hazards include:

• Creditors may not agree to a settlement, and you could end up owing much more once interest and late fees are added to the original debt
• Your credit score could drop significantly if you stop making payments
• You’d be paying for a service (negotiating with creditors) that you could handle yourself
• Creditors could still start debt collection proceedings if they don’t reach agreement or decide not to work with the settlement company

This is when a lender cancels some or all your debt. Nurses, doctors, lawyers, teachers, people who work for nonprofits and government employees may qualify for federal student loan forgiveness. Most hospitals have financial assistance programs that cover bills of lower income patients. You may be able to negotiate forgiveness on credit card and other unsecured debts by contacting the lender directly and showing financial hardship. Lenders are under no obligation to forgive debts. As with other options for reducing debt, be skeptical of any company that promises blanket forgiveness.

If you fall significantly behind on payments, creditors may turn your debt over to a debt collector. Timing depends on the creditor and type of debt. Credit card companies, for example, generally send accounts to collection after 180 days of nonpayment. Having a debt in collections can be stressful. Debt collectors can contact you via mail, telephone, email, text and social media direct messages. While they have a reputation for being persistent, federal law bars them from harassing or abusing you.

The FTC recommends that you talk with a debt collector at least once to get information about the debt. You want to be sure it’s your debt and not a mistake. The collector must provide “validation information” during the first telephone call or by mail. That information includes:

• Amount of money owed
• Name and address of the debt collector
• Name of the original creditor
• Steps to take if it’s not your debt

If you think there’s been a mistake, send the collector a dispute letter within 30 days and ask for written verification of the debt, such as a copy of the original bill. If the debt is yours, you may be able to negotiate a repayment plan or lump-sum settlement for less than you owe.

It’s important not to ignore debt collectors. They could file a lawsuit against you and, if they win, garnish your pay or put liens on your property. Collections generally stay on your credit report for seven years.

If you see no other way out of debt, bankruptcy may be your only option. It is a complicated process in federal court that is best handled with a lawyer. A court may direct creditors to forgive much of your debt or reorganize it so that you can afford to make payments. While your case is pending, creditors are barred from calling you, garnishing your wages or suing you. Bankruptcy may not erase all your debt—child support, alimony, fines, taxes and most student loan obligations usually are not included. There are two types of bankruptcy for individuals:

This is the fastest and most common type of bankruptcy. It can wipe out most of your unsecured debt, such as credit cards, medical bills and personal loans, in about six months. You may be required to sell nonessential assets, such as jewelry or artwork. Chapter 7 bankruptcy typically stays on your credit report for 10 years.

This type of bankruptcy reorganizes your debts so you can get caught up in three to five years. It may be a better option if you’re struggling with mortgage, car, student loan or child support payments, in addition to unsecured debt. You will not be required to sell assets to pay debt. Instead, some debts may be reduced, and you’ll be put on a strict repayment plan. Chapter 13 bankruptcy typically stays on your credit report for seven years.

As overwhelming as debt can feel, it’s important to remember that you are not alone. There are real, practical ways to work out of debt and reclaim your financial future—one decision at a time.