Bankruptcy has gotten more difficult with recent legislation, yet many individuals and their attorneys often turn to bankruptcy without exploring the alternatives. Bankruptcy is a major decision that will have a big impact on your life. It's not a quick fix, and it's best to take a close look at all the options before moving forward with a bankruptcy filing.

The first thing to consider is the nature and age of the debt. In most states, if no action has been brought to collect a debt within six years of the last time you made a payment, the debtor is not allowed to bring action in court. That's the statute of limitations. The debt is unenforceable. If you're within reach of this statute of limitations, and the debtor hasn't filed suit against you yet, then bankruptcy may not be needed. That's not to say the debt disappears after this period of time. The debt remains, but the debtor loses their right to bring action against you for it. However, it does remain on your credit report for seven years.

Depending on your situation, if all your debts are old, you may wish to just "wait it out" instead of filing bankruptcy. However, the strategy of waiting for the debt to disappear has limited use. If the debt is a secured debt, such as a mortgage, you must take some action right away to prevent the loss of your property.

In some circumstances, you may be able to stave off bankruptcy by taking some direct action on your stable of credit cards. If you have multiple cards with high interest, start looking around for a lower-interest card. Many cards have low introductory "zero percent" offers. While the zero percent doesn't last forever, transferring your balances to the new zero percent card can result in some lower payments, at least temporarily.

Once you make the transfer, cancel your high interest cards, and be sure to make your payments on a timely basis every month. The zero percent offers may become void if you are a single day late just one time. However, if you are able to get zero percent for six months to a year, which is common, it may be just long enough for you to get your financial house in order.

As a final alternative, you could try arranging debt workouts or restructuring either on your own or with the help of a credit counselor. Some credit counseling agencies do provide very useful services, but be aware that these are private companies.

Many have "non-profit" status, but in fact, this means very little and does not mean they are necessarily legitimate. These agencies work for you to arrange new payment schedules. You make a single payment to the agency instead of multiple payments to different creditors, and in many cases, they can get the interest rates and minimum payments lowered.

However, these agencies seldom will work towards discounting the debt; repayment is made in full--payments are just renegotiated so as to become easier to make on a month-to-month basis.