When it comes to fixing financial hardships, people often mention the personal bankruptcy process. Right or wrong, many people falsely believe that claiming bankruptcy is a one-stop solution for complete debt relief. This is only partially true, however, as the bankruptcy process is meant for borrowers that have no other way out of their hardships. It’s truly meant for people that have exhausted other options. If you’re not one of those people, then perhaps it’s worth considering some other commonly used options for debt relief –

•    Credit Counseling – when you sign up for credit counseling, what you’re essentially doing is giving an agency a flat monthly fee, which they in turn distribute to each of your creditors. Think of it as a bill pay service. This option is great for people that have the money to pay their bills, but lack the initiative to do so in a timely manner.

•    Debt Settlement – this process is somewhat more substantial than credit counseling in that it’s reserved for borrowers that can’t pay back their entire loan or credit card balance. Under a debt settlement, a company negotiates on your behalf with your creditors to reduce the total amount of money you owe. This process can be quite successful, allowing you to reduce your debt by up to 70 percent in some cases.

•    Tax Relief – if you find yourself behind on your taxes, then it may be possible to negotiate with the IRS to have your tax payments deferred or interest rates reduced. The process involves direct negotiation with tax agencies like the IRS.

As you can see, there are plenty of options out there that can allow you to reduce your debt without having to resort to filling bankruptcy. As with all decisions related to your finances, it’s critical that you speak to a qualified and reputable financial professional before moving forward.