Bankruptcy is a nerve wrecking stage in which a person who is unable to clear off his huge withstanding debts finally files for bankruptcy with the authorities. It may look like an easy option to escape huge debts, but after bankruptcy one cannot take another loan or credit card for 7 or more years. Therefore it is always advisable to stay clear of bankruptcy and try to clear your debts by other means. These means may or may not include professional help. You can chalk out a plan for yourself and follow it strictly.

You have to first get complete knowledge about your withstanding debts. Then you should take a look at your finances and try to make a budget for yourself that you can stick to and is best suited for your requirements. You should cut back on your monthly spending and try to save more and more money. This will help you to slowly over the time collect enough money to start paying off your debts. saving money from very small things will also help you to avoid such troubles in future and in cases of emergency. Another very popular method to avoid bankruptcy is to go for debt consolidation and resettlement schemes. This is maybe the best way to pay off your debts in a legal manner. Resettlement agents take a look at your finances and decide the best possible budget for you. Then they try to negotiate with the creditors on your behalf and try to get you anywhere from 20% to 50% reduction in the debt.

And finally both the sides decide upon very small monthly installments that are easily payable by the debtor. The introduction of new laws has tried to stop the number of bankrupt people from increasing. The new laws proved to be a boon for all debtors because they made debt settlement seem a much more feasible option. Bankruptcy is never a good option, it only prolongs your problems but never finishes them. Spend wisely and save wherever you can.