outstanding debts. In this way, you make monthly payments to only one creditor. Just be sure to follow the schedule properly or else you'll be in for more trouble. Also, avoid making unnecessary purchases that would let you accumulate additional credit. You may end up paying more than you can handle.

 

4. Work some extra hours.

 

If you have a job, see if you can work overtime and make some extra money.  If not, maybe you can pick up a second (or third) part time job somewhere to bring in some extra cash. 

 

If you’re salaried and thus don’t qualify for overtime pay, maybe you can level with your boss and see if you have a promotion or raise coming up that perhaps can be given sooner rather than later.  Be sincere with him or her, if you have bankruptcy on your mind you’ll be less productive than if you can see the light at the end of the tunnel, so be willing to take on extra projects if he’ll give you a break.

 

Have you leveled with your spouse?  If he or she knows the problem you’re facing, and the fact that bankruptcy is certainly possible, maybe he or she can take on a temporary job, or cut down expenses somewhere else.

 

5. Credit counseling at its best.

 

This is the most common option available to most debtors when they don't want to resort to bankruptcy. In this manner, the credit counselor will analyze your debt thoroughly and assess your financial status. After this, the credit counselor may render judgments on whether you really need to file for bankruptcy or not.

 

6. Sell some assets.

 

If you have some assets that may cover up some of your debts, then sell them. The money that you will get from the sale may be used to pay off your debts. This would be better than resorting to bankruptcy.  If you file bankruptcy, you’ll have the possibility of losing those assets anyway, and more.

 

7. Use your home equity to pay off debts.

 

Nowadays, getting a home equity loan is becoming a trend. A lot of people, who are heavily buried in debt, are enticed to choose home equity loans as an alternative to bankruptcy because of lower rates. In most cases, the amount available in a home equity loan is enough to pay most debts. Additionally, the interest rate on a home equity loan will usually be lower, and can have tax advantages.. You should be extra careful when considering this alternative but it is still a better move than filing for bankruptcy.

 

8. Utilize your retirement benefits.

 

If you think you don't have any more choice but to use your retirement funds, then do so. This is still far better than damaging your credit report due to bankruptcy. Cash them out and pay all outstanding debts. There may be some extra charges when doing this, but they may be less than the alternative. What matters most is that you have enough cash to pay your balances and eventually get rid of those pesky phone calls and collection efforts of your creditors.