If you have debt levels that have become unmanageable, some sort of debt relief is necessary before the debt sends your credit into a tailspin. Debt that you can't pay becomes collection accounts that haunt you and your credit score for years. If you just can't continue to pay, bankruptcy offers you a way forward. Depending on your situation, you could get all of your debt discharged. The two problems that have really prevented a lot of people from seeking help through bankruptcy involve its reputation and cost.

Cash, No Credit

Filing for bankruptcy costs money -- at the very least, some filing and court fees. But if you really want to increase your chances of winning and having your debts discharged, you need the services of a bankruptcy attorney. This attorney can help you keep as many of your personal items as possible, as well as keep your business intact if you own one. He or she can also advise you regarding bankruptcy plans that don't discharge all of your debt, such as Chapter 13 bankruptcy. You might not qualify for full debt discharge with Chapter 7, and if you try to file for that anyway, you could be denied the ability to declare bankruptcy at all. The attorney can let you know what you qualify for so you can file for that specific type.

But that attorney is going to cost more money! And you generally can't pay them with credit -- if you're filing for bankruptcy, that's already an indication you'd never be able to pay off that last credit card bill. That attorney's going to want cash, prepaid debit, or other funds that are guaranteed.

Many people filing for bankruptcy borrow from family members or friends, or one of these people gives the money as a gift. Others use up the very last of their savings or dip into retirement funds. The key is to start planning now. If you think you are going to have to file, start squirreling away whatever you can, or talk to family about getting a long-term loan.

The Underdog Option

Bankruptcy's popular image is that it stems from irresponsibility, overspending, stupidity, and any number of negative connotations. This is not what bankruptcy is in real life, though. It is really a resetting of your financial life -- a really big do-over. It does have consequences, such as slamming your credit score and making it more difficult to rent an apartment for a few years. (Many landlords don't want bankruptcies, or they don't want bankruptcies that are less than a certain number of years old. The number is up to the landlord.)

But overall, once the bankrupcty is underway, your financial situation will start to improve quickly. Some companies offer secured credit cards, for example, for people who declared bankruptcy only a short time before. And there are lots of understanding landlords out there who will rent to you after your bankruptcy, though you might have to do things like pay a larger deposit.

So bankruptcy is like an underdog. Many don't think it's the right choice because of popular perception -- but in the end it turns out to be a triumphant choice that lets you get back on your feet and have a more stable life.

If you'd like to learn more about debt relief, talk to an attorney like Curtis A. Anderson, Attorney At Law. Many offer free consultations, so give them a call and get different opinions about what you could do.

And if you can, talk to people who have already declared bankruptcy. They can give you insight into what the process is like (you'll find more than a few saying the preparation was a pain, but the moment they were granted their debt discharge was one of the best days of their lives -- and that the people in the court were quite understanding), and you can get a better idea of how bankruptcy could help you.