If you are drowning in debt in California and want to make a new financial start for yourself, bankruptcy is a viable option. Most consumers file a Chapter 7 or Chapter 13 bankruptcy, but some may opt for debt relief first. If you are unsure where to turn, Resolve provides some steps you can take before you file.

There are often ads on TV, in the mail or on the radio that advertise ways for consumers to get rid of debt quick. These may seem enticing, but there is often fine print that you cannot see until you look closer. Before you file for bankruptcy you may consider debt settlement. This allows you to work with creditors to pay off debts on personal loans and unsecured credit accounts that are delinquent. If you do not have a stable income or your finances are too tight to make payment plans, this may not be a good option for you.

Debt management is also an option. This is when a credit counseling agency sponsors a repayment plan for you. They can create a pay-off plan and negotiate reduced interest rates, so you pay less. In these situations, it is likely that you will pay extra for the agency’s services. This is good for those who have consistent income and a budget that can handle the monthly payments.

Debt consolidation is also an option. With debt consolidations, you pay off all your existing credit cards and loans with a larger loan from one creditor. Options can include a home equity loan, a peer-to-peer loan or a personal loan from a bank. You pay off all your debts immediately and slowly pay back the larger loan over time.

If you feel you have no options and want to wipe the slate clean and start fresh, you may simply opt to file for bankruptcy. When this is your best option, it is a good idea to consult a bankruptcy attorney for help.

This is for educational purposes and should not be interpreted as legal advice.