Clearing debt is the first foremost responsibility of a person who would want to be peaceful and would like to get rid of debt.  Credit history can also be rectified.  Debt is not currently active or has stopped repayment and which is still in the collection mode.  If you work vigilantly, you might be able to negotiate to repay very much less than you are actually liable, since may collection offices buy the debts for much less than you really owe them.

• First of all, you have to jot down a list of your debts, and the healthier way to do this is to get the credit report.  You should start by writing down the amount you owe and also the person or the company to whom you owe the debt to.  Most of the companies would have handed over your loan recovery to collection agencies or factors, and if it is true, it is advisable to sit with the collection agency rather than the initiating company.
• Secondly, you can contact the companies one at a time, and you need to get the amount ready if you are willing to repay.  It is advisable to pay off in one go, if the outstanding debt is less than five hundred dollars. You should be able to offer good amount to negotiate a settlement after having a consultation with the issuing company.  If you are finding difficult to find the contact person over phone, you can go in person, discuss with him and sort the problem out.
• Thirdly, once the discussion and negotiation is done, you need to request the lending companies for a written agreement which would be evidence that you have cleared the outstanding debt in full.  You may send a cashier’s check or a pay order for the amount mutually consented to the company so that they would not go back from the agreement. You need to keep this letter safe till the full transaction is over.
• Fourthly, after the first debt is paid off, it is safe to quickly move on to the second debt which would gradually help you to clear all the debts step by step. The same procedure can be followed as in the previous step for clearing all the debts which you prepared beforehand.  It would not be over by a night. It may take several months to completely pay off all the debts but it is worth suffering for a short time temporarily. Once the list of outstanding debts gets shortened, it gives a sigh of relief, and will motivate you to move through the list quickly and clear all the debts by paying them off.  

This may also be done by going for a secured loan which is offered for very less interest and for a longer period for which monthly instalment amount would be very less.  But, the secured loans are granted based on collateral securities which are mostly your house or any other property.  You will get good amount with long repayment period. In the case of unsecured loans, you are free from risk of losing your property in case of default in repayment since you need not part with any collateral security. But it is of shorter repayment duration and larger monthly instalments which might be again a financial burden. Clearing bad debt often produces great joy and a feeling of freedom since it releases you from your fear, anxiety and mental depression due to the yoke of financial burden.