If you are having trouble paying your monthly minimum payments, let alone paying balances off in full, you aren't alone. With soaring interest rates and high unemployment, many people are having a hard time keeping up with their credit card debt. In today's troubled economy it is tempting to use credit for everyday necessities. Many people are living above their means, charging items instead of trimming the budget. Then realizing that it is too late to simply cut the excess from the budget, they now face either filing for bankruptcy or negotiating debt settlement. At least there are ways to get out from under these huge unsecured debts, and bankruptcy credit counseling services can help you find other alternatives, or understand the bankruptcy process more.

The next step is to figure out which is best for your situation. In extreme cases, filing Bankruptcy is the only solution. If your income has been substantially reduced due to job loss or illness, or if your mortgage payment has increased, making it impossible to make other payments, Bankruptcy may be best for you. This process takes time. You may need to hire an attorney and appear before a bankruptcy court. If you do not own a home, Chapter 7 Bankruptcy may be the best option for you, mostly chosen by those who feel their situation is bankruptcy credit card debt. This type will discharge all of your unsecured debt. If you own and wish to keep your home, Chapter 13 Bankruptcy is the way to go. In this type of bankruptcy, you will be required to pay back a small percentage of your unsecured debt and all of your secured debt.

You must also make all payments on time or you will default on the bankruptcy. Keep in mind that the Bankruptcy will be shown on your credit report for ten years. However you can start to rebuild your credit once the Bankruptcy is discharged. If you can afford to make partial payments, debt settlement could work well for you. You have the right to try to renegotiate the terms of your unsecured debt to avoid being placed in collections or charged off. Each creditor must be contacted. You will have to work out a payment plan that is acceptable to the creditor.

Remember, if you have several debts to negotiate, make sure you can afford to pay the total of all of your new monthly payments. You cannot be late once you enter a settlement agreement. Be sure to get the agreements in writing. Also pay attention to the wording in the agreement. It must say that the company will accept the payments as payment in full. If it states otherwise, this will continue to have a negative impact on your credit report even after you pay the settlement off. If you find yourself struggling to pay your bills, remember that there are ways to get out from under owing more than you can pay. Take your time to decide which option is best for your situation, Bankruptcy or debt consolidation.