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When you’re so far in debt that you can’t see any way out, declaring bankruptcy might seem like a good idea. It’s not. When you don’t pay your debts, you pay in other ways, and you pay for a long, long time.

When you declare bankruptcy, your financial situation becomes a matter of public record. You have to declare the value of every asset you own, including your home and your car, and these assets can be taken to defray your debt. The stigma of bankruptcy stays with you officially for ten years, during which time it will be difficult, if not impossible, to rent an apartment, buy a home, or get a credit card or a car loan without paying exorbitant interest. Credit card companies, particularly, are shameless when it comes to sticking you with bad terms, since they know you have few other choices.

What’s more, that stigma will stay with you even after the ten years have passed. When you apply for an apartment lease, for instance, you may be asked whether you have ever declared bankruptcy. Even if it happened thirty years ago, you still have to answer in the affirmative or be liable to criminal charges for fraud.

So what’s your alternative? There is a way out of debt that will not only help you avoid bankruptcy but will also give you the skills you need to remain debt free in the future. This is called a debt consolidation program.

How a Debt Consolidation Program Can Help You Get Your Head Above Water

When you enter a debt consolidation program, you will meet with an advisor who will help you set up a payment schedule. These payments don’t go directly to your creditors, however. You’ve tried that, and it didn’t work. Instead, your monthly deposit will go into a trust account until a workable sum has been built up. At that point, debt arbitrators will begin negotiations with your creditors to accept a lower lump sum payment.

Obviously, this process will take time, and it will require good discipline on your behalf. You’ll have to learn to live with the reality of buying only what you can afford, and that won’t be easy if you’ve been running up debt carelessly for some time. Be careful of any debt relief program that makes it sound too easy, because they just aren’t being honest with you.

The payoff, however, is worth it. When you follow your debt settlement strategy diligently, you’ll be able to pay off your creditors for less, rebuild your credit rating, keep your finances private, and learn skills that will help you stay out of debt in the future.