When you're struggling and think you may need to go through bankruptcy, one thing to try first is debt settlement. Negotiating your debts and settling them for less than you owe is a good way to reduce the amount you have to pay. It's a great way to eliminate debts if you're able to pay off those debts in lump sums, too.
When you want to settle your debts, how do you do it? Negotiation is key. If your debts are already with a collections agency, you can ask them to reduce what you owe and allow you to settle. Some creditors won't consider this until you're over 90 days delinquent, but if you have a lump sum to offer, they may take it sooner.
Some collectors and credit collection agencies accept payments, too. You may be able to negotiate a lower rate if you set up a short-term repayment plan. For instance, if you offer to pay $400 over three months instead of a $500 bill, they may be willing to take it to get the debt settled. Similarly, if you can pay $350 today, they may take that to settle the debt completely.
When it comes to negotiating, you should know what a credit collection agency is likely to take. Many will settle debts at 40 or 50% of what you owed, which can be very helpful if you have some money to pay debt off in a lump sum.
Negotiating down debts and paying them off after they go to collections is just one way to get out of debt. Your attorney can talk to you more about this and other options.