The statistics can be very depressing. Personal savings rates are at some of their lowest points in history. At the same time, consumers are carrying an ever increasing load of personal debt. Most people have only enough cash in the bank to see them through a couple of weeks at the most. Many people have even less than that and some people may have no emergency cash available.

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With these facts in mind, it is not hard to see how so many people are getting in over their head and considering declaring bankruptcy. Like any other major financial decision, the decision to file for bankruptcy is not one to be taken lightly. A bankruptcy filing will stay on your record for a number of years and will greatly affect your ability to get credit in the future.

If you are having trouble keeping up with your debt payments and considering declaring bankruptcy, there are a number of things you should do to decide if something short of a bankruptcy filing will help you.

One of the simplest things to do, yet one that many people do not do, is to get your spending under control. It will do you no good to eliminate your current debt if you are just going to go back out and wrack up lots of new debt to replace it.

I am always amazed at the number of people who do not take the time to produce a simple budget for themselves and their family. The very exercise of sitting down and determining where your money comes from and where it is going can give you a good handle on your finances and help you to get your spending under control. Seeing everything in black and white can help you determine where you can afford to cut back. Maybe you can cook at home instead of eating out all the time. Maybe you can cut back on your clothing expenses. Make a list of the essential items you absolutely must purchase and go from there. You may be surprised at the amount of money that is leaking out of your budget every month.

Often, simply talking things over with your creditors can be a big help. Your creditors ant to make sure they get paid, and they know that if you declare bankruptcy they may be out of luck. It is in the best interest of your credit card companies, banks and other reditors to help you with terms that will allow you to pay off your debt in a reasonable anner. For instance, your credit card company may be willing to lower your interest rate or even agree to take a lesser amount than the full amount you owe. If you don't ask these questions, you will never know what your creditors may be willing to do.

There are a growing number of firms that advertise themselves as credit counselors or credit repair agencies. To be sure, there are a great many reputable firms in this industry, but you also need to take precautions to make sure you do not get taken by a shady outfit. Like any industry where money is involved, the credit counseling industry has its share of charlatans.

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It is often better, cheaper and more effective to go with a non-profit, community based credit counselor or credit repair agency. Unlike for profit firms, these companies do not make their money off their clients. It is important to try to get the names of previous clients anytime you need to shop for a credit counselor. You will want to make sure the firm is well regarded by lenders. They will be working with your creditors on your behalf, so you will want to make sure a good relationship already exists.

Once you have decided to use the services of a credit counselor, they will need to see an itemized list of your creditors and how much you owe to each one. They will then contact the creditors on your behalf and try to work out terms that are acceptable to both parties. Once the terms have been negotiated, you will pay a set amount each month until your creditors have been paid.

If after taking all the steps outlined above, you still are unable to resolve your debt, bankruptcy may be your only remaining choice. Before you decide to declare bankruptcy, it is important for you to consult a lawyer. A bankruptcy attorney will know what to look out for and how to best protect your remaining assets during the bankruptcy proceedings.