When you feel that your debts are getting out of hand you should take immediate actions to solve this problem. As a rule Bankruptcy should be your last option to fight debt problems. There are many other ways in which you can get your finances back under control.
The initial step should be to know your problem. Find out exactly how much you owe in debt and how much you can spare to pay them off. This will require you to curtail your expenses on luxuries and limiting your monthly expenses to meet only your basic requirements. By doing this you will have more money in hand to give towards your loan repayment.
A good payment plan can help you come out of debt in a more efficient way. Financial experts like David Ramsey suggest consumers to pay off the debt with the minimum balance first. In this way you can get rid of one of your debts and channelize this money towards other loans. But if the loan amount for a few of your debts is almost similar then you should pay off the debt which is charging you the highest interest rate.
While you are working on your payment plan, you should also give a call to your credit card companies and see if you can negotiate with them on interest rates. A good payment history can earn you an interest discount by at least 2%. Also, some of the companies remove penalty charges from the account if negotiated properly.
If you are one of those who have lot of credit cards in your name then you should consider consolidating your debts. If the debt amount is too much to pay then you can try settling your debt with the credit card companies.
It is always better to opt for debt settlement for the unsecured debt which makes the task easier in long run.