In 2010 we are finding more and more people exploring their debt relief options.  Whether you are facing foreclosure or your bills are just too high to pay, you are making the right first step, which is reading as much as you can.

Deciding to file for bankruptcy should be a difficult decision for you.  It is not choice that you should make lightly.  The credit consequences of filing bankruptcy are severe and they will haunt you for a long time.  Before making your final decision, you should definitely seek the advice of a bankruptcy attorney.

There are alternatives.  Here is a list of alternatives to filing a bankruptcy.

Do Nothing

Bankruptcy prevents creditors from getting a judgment against you.  If a creditor obtains a judgment against you, they have the ability to garnish your wages or even seize certain types of property.  However, if you are unemployed and do not own a home, then you may be what is considered “judgment proof”.  Creditors do not typically start legal action against a debtor that has nothing, because it is very unlikely that they would be able to collect any judgments awarded.

Self Management

Your debt is the result of mismanaging your credit.  The most obvious way to reduce debt is to curb your spending and start paying what you owe.  This can be done by creating a monthly budget.  It is likely that you will find numerous places where you can cut down your monthly expenses.

Negotiate with Creditors

Creditors know that bankruptcy is an option for you and that is why most are willing to negotiate a settlement, insuring that they receive at least some of the money owed to them.  Often times the debtor is able to make these negotiations directly with the creditor, however, if you are running into brick walls while attempting this, there are many debt relief specialists that can help you.

Debt Consolidation

Debt consolidation is when you replace a lot of monthly payments with one monthly payment.  This is done by getting a loan that pays off all of your revolving credit card debt, car payments, and other types of debt.  If you have bad credit, then this option may not be available to you.  If this is your situation, then you may want to talk to your local bank manager to see if they will work with you.