You will find that the institutions that carry the highest interest rates offer consolidation loans. While a consolidation loan takes the pressure off your present budget, it is generally considered a sign of being overextended on credit. Remember that the purpose of taking a consolidation loan is to reduce the number of small payments due and help you get existing debts paid. Declaring bankruptcy , asking the court to find you officially unable to meet your debts, is a serious, last-resort solution to financial problems. Filing bankruptcy is an option only when all other attempts at trying to work things out have failed.
Bankruptcy laws provide a way to divide borrower's assets.
Assets are divided and repaid to each creditor, to as full an extent as possible. The law also allows the borrower to have a chance at a fresh start in managing finances. Specific parts or chapters of federal bankruptcy law offer alternatives. Before entering bankruptcy, obtain competent legal advice. Under Chapter 7, a bankruptcy petition must include a list of all assets and liabilities.