• Steps you can take to keep from declaring bankruptcybankruptcy 2 image by Sorin Alb from Fotolia.com
  
  There are many things that you can do before you declare bankruptcy and make a shambles of your life and your credit. Because of bankruptcy, you will have difficulty getting a loan for ten years; and when you do, it probably will have a high interest rate.
  
  

The Law

• The laws about bankruptcy are different depending on the state in which you live. Some states have bankruptcy laws that let you keep your home while others require that your house be sold Talk with an attorney about the bankruptcy laws in your state. Many of them will allow you to inquire for free about bankruptcy. Do this before you entertain thoughts about declaring bankruptcy.
  
  

Assets

• You could lose almost everything if you file bankruptcy, so it should be avoided. Consider moving to a smaller house, driving a compact car instead of a gas-guzzler, and selling anything that you don't need that is of value, like recreational vehicles or valuables around your home. And if you have invested in stocks and bonds that can be easily sold, do so and apply the proceeds to your debts.
  
  

Work

• You may have already discussed your situation at work, since more employers than ever require their employees to have an acceptable credit rating. Talk to your boss about working extra hours because that will be more money that you can apply to your debts. If that is not possible, try finding a second job; your spouse or partner, should you have one, should be finding ways to help out, too.
  
  

Credit Counseling

• You may be drowning in debt. Ask the local office of the Better Business Bureau about which credit counseling companies they might recommend, or go to the website of the National Foundation for Credit Counseling for the names of companies in your area. After assessing your situation, credit counselors will talk with each of your creditors and negotiate new terms that are suitable to you. Once done, you and they will determine the amount you can conveniently pay each month to pay them off. In many cases, you will send the credit counseling company one check and it will pay each of your creditors.
  
  

Your Creditors

• Instead of using the services of a credit counseling company, contact your creditors yourself. Tell them your financial situation and ask them for solutions. Most creditors would rather you pay something than filing bankruptcy.