Credit card debt in the United States is at an all-time high, and delinquency rates on installment loans, revolving credit and mortgages have experienced double digit increases, as well. Many credit card issuers will increase an account holder's interest rate after just one late payment - and in most cases, even if that one late payment is received only one day past the scheduled due date.

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If you're in a situation where the creditor won't negotiate with you, it may be time to seek professional advice. "Most creditors have heard every sad story in the book and are forced to be pretty hard-hearted," says Mike Whitten, senior counselor at the nonprofit Consumer Credit Counseling Service of Mid-Oregon in Eugene . "Having an impartial third party negotiate for you often gets results. Sometimes creditors will lower the interest rate on a loan just to show support for the debtor and to assure that payments are on time."

According to a recent survey conducted by the National Association for Business Economics (www.nabe.com) the combined threat of subprime loan defaults and excessive indebtedness has overtaken terrorism and the Middle East as the biggest short-term threat to the U.S. economy. As a result, an increasing number of borrowers are turning to credit card debt relief programs that allow them to negotiate away a significant part of the balance that they owe. 40 to 55% debt reductions are being reported by debt settlement companies every day. What kinds of debt can I negotiate? - Debt negotiation will only work for unsecured debt like credit card debt, personal loans or medical bills. Negotiating credit card interest alone could save you a pretty substantial amount of money because credit cards have compounding interest. But, you'll typically also be able to negotiate down the balance. If you owe on student loans, you may be able to get penalties and interest reduced. And, although automobile loans are secured loans, you may also be able to negotiate down interest and penalties on those, as well. You may also be able to negotiate a forbearance on your student or auto loan, which would allow you to take a break on your payments, so you can get a chance to get back on your feet financially. But, you typically cannot get the principal balance on either of these types of loans reduced.

But, there's good news for those who owe on student loans. Starting in July 2009, struggling grads can opt for a program that bases loan payments on up to 15% of their annual discretionary income, defined as gross income above 150% of the federal poverty level. (The 2008 poverty level for an individual is $10,400, plus $3,600 for every additional family member.) The College Cost Reduction and Access Act of 2007 increases funding for financial aid, offers tuition assistance for students who plan to teach and helps struggling graduates repay their student loans.