40,000 in debt

$300 a month on a $40k loan? You have to be realistic. $300 probably wont even touch your interest. You wont qualify for personal loan unless it is a secured home equity loan. Lenders are just not lending this size of loan unsecured...and even if they were, you be looking at a payment of $500-600 per month. And going with a debt management company will major time tank your scores.

Really the only way to pay off this type of debt load without damaging your credit is to make the payments and then some each month. Work a second or third job if you have to. You could ask your creditors to lower your interest rate but that is not likely to happen.

I went late on all my cards and waited for them to call (before going 30 days late.) I was able to get a 5 year payout at 0% on all my accounts except American Express (they did 6 months at 0% and then 6 months at 9% at a reduced monthly payment, then back to normal). This reduced my monthly payments and made everything start going to principal. My credit wasn't affected. They all seemed to have a hardship program but I found being 2-3 weeks late got you in the right department to get one! You can't call when you are current.

Another option you may have is if you have some money in a 401(k) or other retirement account. See if you can take a loan from that and then arrange for settlements. The settlement process will tank your score, but with settlement the score comes back pretty quickly. When I settled mine around May 2010, my score dropped from about 720ish to 584. But by January 2011, it had already risen back up to 684 since I had a car payment and a mortgage that I continued paying on time. So the score drop from settlement really is only temporary.

i agree with Gawe on their method... with the cc banks, if you just dont make a payment, as soon as the "cycle" creates the next bill, they will start calling you. if you have always made a monthly payment, they will ask you if you are having any type issues in relation to income, and you say yes, i am under a financial hardship and they will ask what has caused the hardship. ask them about their hardship program. they all have one, but bank of america is the most difficult one to deal with...for us, citi & chase were the easiest to work with, and gave the better payment arrangements..
we only have one income for years now due to my fighting with ssa for disability. and when i joined this site we owed over $70 k in cc debt. we were on hardship plans with all the banks for a while, using money left over from mr generallee's income, yard sales, side jobs on weekends he does & our savings/tax refunds, until we extinquished most of that. so far we have settled out 2 ccs, 2 that are almost paid off (low monthly payments that we can still handle), and the others are about to be charged off or sent to collections or attorney- but those 2 banks are still ringing our phones-so we know they still have the accounts in their possession...
we have considered bk 7, but i have a ssdi hearing in early august, and in case i do get approved for benefits (most likely wont know if i am approved for at least a month or more), i can settle them all out with my backpay. plus i know if we file bk, then i get approved, they can force us into bk 13 and then the court would get most of my check every month for 5 years.. not a chance i am willing to take.. at least at this point, if the remaining banks not getting payment do decide to turn over to attorney or whomever, it will take a bit before a judgement or anything can be completed. in which at that time, i should have my answer from ssdi & if i am approved, we can pay, and if i am denied, then we can & will file bk 7...

thanks for the advice, this may be the best option if i can get my interest to 0% then everything will go to the principal. I am still scarred about my credit score dropping, i am 32 now and have had good credit since i have had a job, much the same as you (710ish), just a high debt to income ratio. i will let you know what happens