If you have fallen behind on your bills, you may be considering your options when it comes to debt relief. There are several things you need to know about debt, bankruptcy, and alternatives to bankruptcy. You should consider consulting a bankruptcy attorney, who not only knows your region's laws, but who can advise you about the alternatives to bankruptcy in your unique situation. But for now, here are some helpful bits of information on debt and debt relief.

1) Not All Debts Can Be Treated the Same

Point #3 will go more in-depth on this, but there are some debts that pose a bigger threat than the rest of your debt does. Furthermore, the type of debt you have will affect the routes you can take. If you cannot pay your mortgage, there could be federal programs to turn to. Medical debts could be solved by working with your medical provider. Student loans are also open to being addressed by a government program.

2) A Budget Is Your Best Friend

This is your first and best debt relief option. In order to achieve it, you need time and diligence on your side. If you have the opportunity to do this, you can:

• Write up your income and expenditures
• Find things you can change
• Brainstorm ways you can make more money
• Figure out how much you could use to target your debts
• Know which debts take higher priority
• Create a budget; follow it carefully

3) Hone in on Secured Loans

Speaking of high-priority debt, secured debts are far more dangerous than unsecured debts are. Secured debts are backed by collateral. For example, car loans are backed by your car, and your mortgage is backed by your house. If you default on your car loan, your vehicle can be quickly confiscated. Unsecured debts, on the other hand, include things such as medical debt and credit card bills. Creditors usually have to go through the process of suing you first before they can start to go after your property. When you cannot pay all your debts, go after the secured debts first. For instance, pay your mortgage and car bill this month even if that means leaving your department store's card bill unpaid for the time being.

4) Talk with Your Creditors

You may be able to negotiate a more manageable payment plan without the hassle of a long legal process. You might want to speak to your creditors directly, see if they would be open to letting you miss a couple of payments and then make them up later, or maybe to drop your late fees, etc. However, it should be noted that you cannot do this if you are going to file for bankruptcy, which means you really do not intend on repaying your debts. At this point, according to the Fair Debt Collection Practices Act, you can actually ask your creditors to stop contacting you, which can already mean a considerable amount of relief.

5) Credit Counseling: Potentially Useful, Potentially a Scam

There is a chance that you can benefit from some money management training and advice, maybe get some professional help with budgeting. But there are also plenty of agencies out there that do not have the right credentials, will not deliver on their guarantees, and that will overcharge you, or even steer you wrong. Do your research so that you only work with a legitimate agency.

6) The Debt Negotiation Service Field Is Riddled with Scams

There are many entities out there saying they can help you create the debt management solution you need, or who can handle successful debt negotiations for you. There are places where you may able to find this help, but proceed with great caution. An incredible percentage of such businesses operate scams, leaving you with excessive charges and harmful advice. Some "companies" will simply steal your money outright.

7) There Is Much to Consider Before You Consolidate Your Loans

Loan consolidation could mean wrapping up all of your debt into one massive loan, a secured loan that is backed by your house. You would pay off your unsecured debts with your home's equity or through a second mortgage. There are reasons to go after this option, such as:

• Lower interest rates
• Tax advantages

But then there are also reasons to reconsider this option as well:

• Threat of foreclosure if you can't pay
• Potential to wind up with a crummy payment plan
• Potential high fees just to get the loan

Before you go this route, you should speak with a tax expert.

8) Don't Go to Credit Repair Clinics

Ignore the guarantees that your credit will be fixed, that you can get a loan, etc. Basically, these clinics ask you to pay them for services you could easily perform on your own. As these clinics charge you for something that should be free, it is small wonder that these agencies have been found committing other underhanded tactics as well.

9) You Have Legal Recourse Against Debt Collector Harassment

Know your rights under the Fair Debt Collection Practices Act. If you are behind on your payments, your creditors may have turned to a collection agency. There are some things that these collectors are simply not allowed to do, such as:

• Make calls at unreasonable hours
• Employ abusive words
• Lie to you, or even misinform you
• Tack on unsanctioned fees to your bills
• Harass you

If you have been subjected to any of these actions, hold onto the proof. Request that the agency stop. If they don't, you can file a complaint, or perhaps sue. You may have further protections under your state's laws.

10) Bankruptcy Is More Helpful Than You Think

This is actually an affordable option for debt relief that could wipe your slate clean and let you start rebuilding your credit as soon as the bankruptcy has finished. You have two main options when it comes to bankruptcy, Chapter 7 liquidation bankruptcy and Chapter 13 reorganization bankruptcy. Under Chapter 7 bankruptcy protection, you can eliminate most of your unsecured debts if not all of them, and the process should be over in a matter of months. Chapter 13 bankruptcy takes three to five years, and through this process your debt is restructured so that you are able to repay some, if not all of your debts. If loan consolidation is an option you are considering, Chapter 13 bankruptcy may be a much better way to go. Talk with a bankruptcy lawyer to see which process is right for you.

Whether you want to know more about bankruptcy, understand your legal rights, or explore more options, find the legal professional you need our lawyer directory today!