Over the past decade American Consumers have faced challenges as a result of our tumultuous economy. The challenges typically stem from the volatile stock market, stagnant wages and/or periods of high unemployment. Any of these aspects of our economy could work alone, or in combination, to create a situation where you may find yourself without the necessary money to cover your debts. And, assuming that getting an extra job or additional income isn’t an option, you have two basic options.

First, you can work with your creditors to solve the issue(s) that you are having. Sometimes it is a change in interest rate or payment terms. Other times, it can be some kind of forbearance or settlement. If those options aren’t available, then your second option is considering filing for Bankruptcy.

I have had success in helping my clients settle with creditors in order to close troublesome accounts. While there is a temporary dip in credit score, this tactic can avoid bankruptcy and create some immediate relief. Sometimes, with a lump-sum payment, accounts can be settled at a discount of around 35% of the principal.