If you feel you're in over your head and just can't seem to get ahead of your debt you may seriously be considering filing for chapter 7 or chapter 13 bankruptcy. Debt consolidation organizations just didn't have the right options for you and your amount of debt may be too large for you to cope with on your own. So bankruptcy seems like the only logical resort, right? And the answer is absolutely not. While debt consolidation services and debt counseling have consistently proven to be the most effective methods of debt relief, ultimately you have to be comfortable with whichever method you choose. And if going to the effort of finding a counseling agency that you can trust seems like more trouble than you have time for, save yourself the headache (and heartache) of learning bankruptcy laws, check out some of these alternatives to filing bankruptcy.

Bankruptcy Alternative 1: Debt Workout

A debt workout is done through an attorney who will contact your creditors and try to rearrange the terms of your payments. Sometimes they can negotiate a creditor to settle for less than what they are owed and most commonly they will extend the length of your payment term. The primary benefits of a debt workout program are that you are saving yourself the scars on your credit report that will surely come with filing for either chapter 7 or chapter 13 bankruptcy. With debt workout you can even manage to keep property if you've missed out on a few mortgage payments; even unsecured debt can be worked out. Make sure to find a lawyer who understands your credit situation as well as your living situation so they have the resources to negotiate terms that you can live with.

Bankruptcy Alternative 2: Budgeting Tools

If you feel more comfortable doing this on your own and you have the will power to stick to it, budgeting tools can b a huge help when allocating where your paychecks go. Typically any given household will spend 35% on housing, 15% on transportation, 10% in savings, 25% on miscellaneous expenses, and 15% should be dedicated to paying off your debt. If bankruptcy is really something you want to avoid check out one of the many budgeting calculators to help more effectively distribute your income across all fields. While this alternative may not be ideal for everyone, those with the resolve to evade the stress that comes with filing for bankruptcy can benefit from this method.

Bankruptcy Alternative 3: Objective Calculators

So you're making the minimum monthly payments and don't seem to be getting anywhere. The credit card companies do intentionally require minimum payments that guarantee they will get the most bang for YOUR buck. Drawing out payments increases the amount of interest you will have to pay in turn lining their already deep pockets. There are however, many online tools you can use to calculate a monthly minimum payment that will actually get you ahead of the curve. This method works best when combined with the previous to really get a grasp on which portions of your monthly paycheck need to go where. Though it will take some time, this method is sure to get you out of the red.

All in all, bankruptcy, chapter 7 or otherwise, doesn't have to be the only option. Find the method you are most comfortable with and persevere. Best of luck.