If you're unable to pay your creditors, filing for bankruptcy can help you get a fresh start by liquidating your assets to pay off your debts or create a payment plan.
Yet since bankruptcy has far-reaching and long-lasting results, you should first consider other debt management options.
There are two main types of personal bankruptcy: A debt collector generally is a person or company that regularly collects debts owed to others, usually when those debts are past-due.
This includes collection agencies, lawyers who collect debts as part of their business, and companies that buy delinquent debts and then try to collect them.
One debt relief solution may be a debt management plan; another may be bankruptcy. With a debt management plan, you make one payment to the credit counseling agency, which distributes the money to your creditors until they are paid in full.Even if they are members of such organizations, though, be picky. So while the agencies and employees vary, the plans are all structured the same way: Your counselor determines how much it will take to pay your creditors in full in three to five years. Debt consolidation is a third-party payment system. Agencies range in quality so make sure you shop around. Most debt consolidation plans are structured the same way. They ensure member agencies pass rigorous standards set forth by the Council on Accreditation or another approved third party, and that their counselors pass a comprehensive certification program. Financial institutions don't give preferential treatment to any one organization, nonprofit or otherwise. However, if you just happen to have accounts with creditors that don't offer any concessions, that benefit is reduced. Look for a nonprofit credit counseling organization that belongs to either the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America (FCAA).You can find free or low-cost credit counseling options at: Under the provisions of the Servicemembers Civil Relief Act (SCRA), you may qualify for a reduced interest rate on mortgage payments or credit card debt, protection from eviction, or a delay of all civil court actions, such as bankruptcy, foreclosure, or divorce proceedings.