Most of us are no stranger to debt. We borrow money to buy homes, cars, stereo systems and even meals at restaurants. If we pay it off quickly, it doesn’t have a negative impact on our lives. But all too often, we let debt keep piling up until it buries us.

When debt gets out of hand, we have some options. But most of those options are not particularly pleasant. Ignoring debt collectors’ phone calls and letters might seem like a solution, but it just makes our lives miserable. And if the debt is secured, repossession is always looming on the horizon. Filing bankruptcy is a possibility, but we may lose some of our property or be required to repay a portion of our debts anyway.

Situations like these often call for rather desperate measures. If you own a car, you might consider selling it and using the proceeds to pay off debts. That is certainly an option, but it’s one that should not be taken lightly. Here are some of the pros and cons of selling your vehicle to settle debt.

Pros

* If your car is fairly new and in good condition, you could get enough money out of it to eradicate your debts. At the very least, you should be able to put a large dent in them.

* Without a car, you won’t be subjected to the everyday expenses associated with driving. You won’t have to pay car insurance, buy gas, get tune-ups or replace tires. This will leave you more money to live on, and to put toward your debt payments.

* You’ll have less of a negative impact on the environment. Walking, biking, or even taking public transportation is less harmful to the earth than driving a car.

Cons

* You’ll have a harder time getting where you need to go. If you live in an area with good public transportation, not having a car isn’t really a big deal. But if you live in a rural area, you might find it difficult to make it to work, buy groceries or run errands.

* If you still owe money on your car, selling it to pay debts may not be an option. The only way it will work is if you can pay off the loan with the proceeds and still have enough money left to put toward other debts.

* By getting rid of your car, you might lose opportunities to make extra money to put toward debt payments. If you don’t have reliable transportation, it will be more difficult to get a second job or start a side business.

Selling your car to settle debts is a big decision. It’s not right for everyone, but in some cases it can prevent your credit from being ruined. Before you put your car in the paper, consider the consequences carefully. If you can live with them, selling your vehicle could be the solution to your problems.