Can’t you finalize the payments of all your debts this month? Or worse, since many months?

You are not the only one. Like many others, you may find yourself in a position where debt is too high and you can’t affort to pay it anymore.

Yes, nowadays, consumer debt is widespread.

You may have lost your job, after making a big purchase (like an expensive car) and you can’t pay the loan right now.

There are many advertisements with promises of debt relief, but you should also consider the option of bankruptcy (even if this should be your last resort). And the reason is simple: it will negatively impact your credit score and your ability to borrow money at decent interest rates.

Remember, the bankruptcy data remains on the your credit report for 10 years, and will influence the ability to get credit, a job, insurance, or even a place to rent.

debt relief

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Before asking for a debt relief (or worse, going bankruptcy), you should consider the following options:

  • contact your creditors and see if you can make a deal, modifying your current payment plan;
  • get in touch with a professional, asking for a credit counseling. He can analyze your situation and advise about the best solution.
  • study all your other options, before taking another debt. While another big loan can allow you to consolidate your other debts, it will probably collapse your situation in the future (and probably require a warranty, such your home).

If you can’t follow any these options, you may require a professional help about debt relief or bankruptcy.

There are two kind of personal bankruptcy: Chapter 13 and Chapter 7. For more information visit

And now let’s see the benefits and risks of getting a debt relief:

Benefits Risks
Debt relief can be a low cost alternative to bankruptcy. Debt relief is only available for certain amount of money.
You don’t pay anything towards your debts for a specific amount of time (generally, 12 months) and after that they will be written off. You’ll need to pay Insolvency Service. Ask for professional services.
Your creditors can’t pursue you for your debts during that specific period. You can’t apply if you’re a homeowner.
With debt relief, you don’t need to appear in court. Debt relief will appear on a public register and will affect your credit report negatively.

Remember, if you find yourself in difficult economic situation, the first thing you should do is asking for a consulting service.

A professional will analyze your situation and give the best advise for solving your debt issues.

Debt relief or bankruptcy should be your last call. Learning how to manage your finances should be one of your first priorities.