Getting Advice

• Non-profit credit counselors can offer unbiased advice about the debt management plan that's best for you. Counselors certified by the U.S. Trustee Program -- a part of the U.S. Department of Justice -- are experts in resolving debt issues, and initial consultations are usually free. Credit counselors can describe all alternatives to bankruptcy in detail and even offer to act as your long-term advisor on credit issues. Counselors, such as those affiliated with Consumer Credit Counseling Service, are available in most communities.
  
  

Debt Management Plans

• Counseling agencies often suggest debt management plans as an alternative to bankruptcy. The plans allow the agency to take control of most of your monthly bill paying, as it negotiates with your creditors for lower interest rates, lower monthly payments, and the waiver of some fees. Payments to your creditors are made each month after you forward a lump-sum check to the agency. The goal of the program is to eliminate, or greatly reduce, most of your credit card and other unsecured debt within four or five years. During that time, the counseling agency will ask you to adhere to a strict budget, with much of your money after everyday living expenses being used to pay down debt.
  
  

Debt Settlement

• For-profit companies specialize in debt settlement programs, but it is simple to do yourself. Debt settlement allows you to pay off delinquent credit card and other unsecured debt for less than the full amount owed. The SmartMoney website reports that credit card companies will often settle delinquent accounts for 20 to 75 percent of the balance. You can request a settlement simply by writing or calling your creditor and asking. MSN Money reports that credit card companies will offer a settlement as the delinquent account approaches the six-month past-due mark.
  
  

Payment Plans

• Simple payment arrangements with creditors may be all that you need to avoid bankruptcy. Many creditors offer so-called hardship programs to people suffering from a temporary setback such as a job loss or illness. You may be allowed to skip a few payments or pay a smaller monthly payment over the course of several months or a year.
  
  

Loan Modification

• Loan modification can make mortgage loans more affordable, ending the threat of foreclosure and possible bankruptcy. Housing counselors certified by the U.S. Department of Housing and Urban Development can contact your mortgage company directly to work out solutions for your mortgage problems. Possibilities include loan modification agreements, which allow the terms of your loan to be changed so that your payments are affordable.