The current level of economic weaknesses in the American dollar means more and more people are looking for an alternative to bankruptcy. With the current pace of foreclosures and banks themselves struggling to stay solvent bankruptcy seems to be inevitable for many. Let's look at some basic information on alternatives to bankruptcy.

What are the alternatives to bankruptcy? The first and most obvious alternative to bankruptcy is of course not to go into debt. While this is the most common sense, many people simply feel they cannot live without debt or living beyond their means. It cannot be expressed how important it is to stay clear of creating new debt when trying to get out of old debts. Remember a collection agency will not call you if you do not owe a debt to anyone.

For those who are in deep debt, which is the majority of people nowadays, a very popular alternative to bankruptcy is to consolidate. Consolidation of debt can be a true source of financial relief if you can have everything piled into one bill. It gets even better if that one bill is being paid at a lower interest rate than some of your past debt. While this will buy you more time to pay, it will ultimately not lower the debt, but increase it. For many this is acceptable practice, therefore debt consolidation companies exist.

If you can not consolidate your bills, another alternative to bankruptcy is to go to your creditors and arrange a meeting to see if they will allow you to pay less per month, or perhaps lower the debt altogether. This type of debt negotiation can be successful in some instances. There are some professional debt negotiation companies who are out to make a profit from your debt. Some masquerade as non profit agencies, there to help the public out of their debt problems. Be especially careful when speaking with debt negotiation companies about alternatives to bankruptcy. The Federal Trade Commission ( FTC ) has written a release about the ' National Consumer Council ' and the complaint filed against this company masquerading as a nonprofit debt negotiation organization.

Debt settlements or debt settlement proposals are not a valid alternative to bankruptcy. A good example of a debt settlement is one where you pay a company that claims they can ultimately lower your debt. Just this one sentence should tell you that the debt settlement company is there to take more of your money. They will be charging you fees for their service, which takes an even larger amount of your money. Stay away from debt settlement companies since they are practically the same as a debt negotiation company.

Alternatives to bankruptcy are usually found by going to professional credit counselors who can give personal advice after they learn the details of your money problems. Dave Ramsey is one popular counselor in the United States who has helped many not just to avoid bankruptcy but to get out of debt altogether. Getting completely out of debt should be the ultimate goal of everyone who enjoys peace of mind concerning their money.

Author: Michael David

About the author:
Michael David is a content producer. He has 11 years of experience with producing content and writing. If you are serious about getting out of debt and avoiding bankruptcy then you need Dave Ramsey's Total Money Makeover: A Proven Plan for Financial Fitness.

Article source: Free Bankruptcy Articles.