When you are in deep financial trouble, bankruptcy is not the only option. You should carefully weigh bankruptcy...both the pro's and con's. Bankruptcy can absolve you of your debt or put you in a position to repay your debt within a framework that will work for you, however your credit will be damaged for seven years.
An "out of court settlement" is a possibility to consider for your unsecured debt. Instead of going through the tedious process of bankruptcy, a settlement at a reduced amount is a possibility. This is still a challenging process and it is highly advisable to engage a professional who is qualified and experienced to assist you, otherwise you may be stuck with derogatory marks on your credit rating.
"Debt counseling services" can provide a viable alternative. Through this process, debts may be consolidated, as well as more favorable repayment terms can be negotiated. This may include a reduction in interest as well as a reduction in the outstanding balance. Use caution when enlisting these types of services, as they likely will have an affect on your credit rating.
"Debt consolidation loans" is another alternative, especially if you do have equity in your home. Borrowing against your equity is a viable and simple option, however you want to make sure that your increased payments from a second loan will be manageable, and not put your situation in a more precarious position. You do not want to default on a home mortgage of any type as the consequences are much worse than other types of credit.
Keeping your options open and being creative with your financial picture has both its risks and rewards. Know your options...it is Empowering!
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