We are a bankruptcy law firm. There are alternatives, but be careful. (see consumers beware and homeowners beware of investors).

DEBT CONSOLIDATION PLAN One alternative outside of bankruptcy is debt consolidation. Here you set up a plan to repay your debts. Sometimes they can reduce your interest rate on debt as well as waive penalties. These organizations do not have a particularly good success rate. The credit history is often negatively affected because many of the debt consolidation companies will notify the credit reporting agencies of you being in the program. You will still have to pay interest on your debt. These credit counseling companies are generally compensated by credit card companies. (See consumers beware)

CONSOLIDATON LOAN With this alternative to bankruptcy, you would take out a loan to pay off your debt. This has some advantage over having to make payments on several bills every month. Sometimes you maybe able to reduce the interest charges on you debt. The downside is you will need to qualify for such loan which maybe challenging. Here a lender may require that you own a home that has equity to cover the loan. Be careful on such loans because it may raise your monthly payments on your home that is unsustainable in the long run which may put your home at risk. These loans may last 10 to 30 years and the accrual of interest over these years will add thousands to the cost of the money borrowed.
If you not seeking a home equity loan but an unsecured loan, you likely need to have a very favorable income to debt ratio. This maybe very difficult to qualify. These type of loans can have rather high interest rates.

BORROWING AGAINST RETIREMENT By borrowing against your retirement will replace your interest bearing debt with a loan to yourself with retirement plan. Most 401k’s will allow such action. Be careful because your retirement was designed for you to enjoy latter on in life. Also, there are severe tax consequences if you stop repaying this loan to your retirement account.

DEBT NEGOIATION Here one contacts each creditor and offers a lump sum payment to settle the respective debt. Some creditors will not engage in settlement negotiations unless you are at least three months in arrears. When dealing with many creditors, you will find a wide range of settlement offers. Some may only offer a token discount while others may settle for a significantly lower amount. To proceed with this option, you will need to have funds on hand to offer the creditors.