If you have found that you are in a financial crisis and are considering bankruptcy you may want to first consider using a debt consolidation service for help.
If you have any type of ability to make a monthly payment toward your debt this may be the answer you are looking for.
Unlike bankruptcy a debt consolidating firm can help you to arrange repayment of your debts at a considerably lower monthly payment.
These firms have the ability to negotiate with your creditors to remove fees and penalties, reduce interest rates and lower your monthly obligation.
Credit counselors can work with you and your creditors to find a simple and effective way to repay your debt and stay out of bankruptcy.
Creditors are more apt to work with people who want to pay back their obligations instead of filling bankruptcy.
With bankruptcy you are absolved of all your debts and the creditors may receive nothing.
Since this is a bad business decision on their part, they will work with you to keep you from filling bankruptcy.
If you file bankruptcy, due to the many new laws, you may be required to sell everything you own including most of your clothes and personal effects.
Bankruptcy clerks will be required to inventory your personal belongings, in person, and determine what will be put up for sale to repay your creditors.
With this in mind, it is in your own best interest to find a way to repay your debts on your own.
A debt consolidation company will work with you to find the right solution.
They will take the time to review all your debts and your income and payment obligations.
Once the amounts are determined of your unsecured debt, the credit counselors will begin to contact your creditors to make arrangements to repay the debt at a lower cost to you.
Debt consolidation can be done by either obtaining a loan to pay off all your debts at once leaving you with one monthly loan payment or by paying one monthly payment to the consolidation service and they in turn disperse payments to your creditors.