People regularly put themselves into a position where they simply can't pay their bills, particularly in today's economy which isn't very sympathetic to the poor or even the middle class. Inflation has impacted almost every facet of daily life containing food, gas, rent, clothes, utility bills and more. At the same time, salaries, mainly in the lower ranges, have utterly failed to keep pace. When you get to the position where you can't pay your bills and have little money left over for food and other necessities, there are some hard decisions that have to be faced. The alternatives are credit counseling and debt management services, or bankruptcy. Both have their pros and cons, so which road to take depends largely on the individual and how severe his or her financial difficulty have grown.

There are several debt management/credit counseling services available, both in most local communities and over the Internet.  These services vary significantly, for instance some charge fees and exist merely to make a profit, while others are strictly operated by volunteers and don't charge fees for their services.  Some services are certified or accredited, and others aren't.  Some guarantee confidentiality, and unfortunately, others don't. 

If your debt situation has not yet reached a point of no return, credit counseling and debt management may be the best alternative for you.  This is the way it works: 

·         Check out the different counseling services, both in your community and on the Internet to determine which best suits your requirements.  Keep away from those that charge high fees, don't guarantee your privacy and that don't have any credentials or accreditations to give. 

·         Make an appointment with the agency of your choice.  When you go to the appointment, take as much of your paperwork and documentation with you as you can, i.e.  proof of your expenses and income, together with verification of the debts you owe. 

·         The counselor will examine your situation and develop a plan that will help you pay in full your bills.  Legitimate credit counseling services can usually persuade your creditors to take less than the total amount you owe and organize for longer periods of time to pay the debt off. 

·         Before paying your bills directly, most of the time, you make one payment each month to the counseling service, which then distributes that amount among your creditors in accordance with the agreements they have worked out.  The arrangement will leave you with sufficient money to live and halts collection methods.  Over a period of time, all your bills are paid in full and you basically have a new begin, provided you don't get yourself back into additional debt for the time being. 

Alternatively, if you have too much debt and your creditors aren't likely to work out payment arrangements with you, the best possibility for you might be to file for bankruptcy.  There are several attorneys for bankruptcy and, once more, it behooves you to shop around to get a hold of the best possible services at the least possible price. 

It is wisest to work with an attorney who does a lot of bankruptcy work for the reason that he or she will be more aware of the rules and regulations as well as with the judges and bankruptcy trustees who work in the local system.  A good attorney will know what the trustees and the courts will allow and what they won't, and will be capable of advising you about your best options. 

There are two types of bankruptcies available to person debtors.  Those are Chapter 7 and Chapter 13.  Chapter 7 is a complete discharge of all unsecured debts, and some secured ones, typically consisting of everything except taxes and school loans.  The debtor generally needs to give up anything of value that can be sold to pay his or her debts, although most of the time a person's home and their primary transportation are exempted.  In a Chapter 13, nothing needs to be given up, but the debts must be fully paid off.  The court only works out a repayment plan and before paying the money to your debtors, you pay it to the bankruptcy trustee who will then distribute it to the creditors.  There are advantages and disadvantages, as well as eligibility requirements, for both sorts of bankruptcy and the bankruptcy attorney could best advise you which alternative will be more suitable for your particular situation. 

Whether you select credit counseling or bankruptcy, either one could provide you with help in getting rid of debt and getting back on your financial feet.  Both could stop collections procedures and stop annoying and harassing phone calls from collectors.  The bottom line is, you don't need to continue suffering; there are ways to get out of the debt situation and start again.  The most important thing is, when you are out of debt, carefully manage your money so you do not land back in the same situation again.