Getting Debt Relief without Bankruptcy

This following article is from: Filing for bankruptcy is a common strategy used by those who are deep in debt and want to get out of it quickly. If you find yourself under a mountain of debt, filing for bankruptcy may be tempting because it allows you to essentially restart your financial life and get out from under the debt right away. On the other hand, it ruins your credit and makes it very difficult to apply for any financing again in the near future. If you do have debt problems that you do not want to file for bankruptcy, there are some alternatives to consider.

Debt Management Plans

Debt management plans are often issued by credit counseling services. With this type of plan, you enter into an agreement to send a monthly payment to the credit counseling service. The credit counseling service will then take your money and make your debt payments for you. In addition to handling your payments for you, the credit counseling service will also negotiate lower interest rates with your creditors. With this option, you have to repay your debt over a period of around five years in most cases. The good news is that it does not affect your credit score negatively and you can save some money on interest charges over the life of your debt.

Debt Settlement

Another alternative to filing for bankruptcy is utilizing debt settlement. With debt settlement, you get to pay less than what you actually owe. This is a type of debt reduction involves the creditor writing off part of what you owe. You pay a lump sum in exchange for getting debt relief from the creditor. This can get you out of debt relatively quickly as long as you have enough money to offer as a settlement. The drawback of using this method is that it can hurt your credit score a bit. Creditors will see that you did not pay off all of the debt that you owed and this will hurt your credit score.


Before filing for bankruptcy, you may want to explore some of the other debt help options that are available. If you do not at least take a look at some of these other options, you may be throwing away your credit score for nothing. At least take the time to review these options and figure out if any of these methods could work for you.