Blogging for Change

Best Options for Avoiding Bankruptcy

by Jesse Campbell on
8/12/2025
in Repaying Debt
Woman reviewing financial documents.

If you're feeling severely overwhelmed with debt, you may be considering bankruptcy as a possible solution. For many people bankruptcy is the right way to go, but it's not an easy process. Filing for bankruptcy can be a long, costly process, and the negative impact of having a bankruptcy on your record can make it difficult to access affordable credit products for a long time.

So before you start the process of filing for bankruptcy, let's take a moment to explore some alternatives to bankruptcy that can help you regain control of your financial life.

Consolidate your debts

Debt consolidation is a strategic approach that involves merging multiple high-interest debts into a single, more manageable loan or payment plan. By doing this, you can often secure a lower interest rate, reducing your monthly payments and making it easier to keep up with your financial obligations.

  • Debt consolidation loans may be a good fit if you haven't missed any payments and your credit is in good shape. At the very least, this will simplify your monthly finances and if you get a good interest rate it may make getting out of debt more affordable.
  • Transferring multiple balances onto a new credit card with a low promotional rate can provide temporary relief, but if you don't have a sustained plan for paying off that debt you may find yourself back in trouble quickly. 
  • A nonprofit debt management plan doesn't require a good credit score (there's no credit requirement at all), can lower your interest rates (below 7% on average with MMI), and can have you out of debt in as little as 24 months. 

Talk to a credit counselor

Seeking credit counseling from a reputable agency can be a game-changer. Credit counselors can work with you to create a budget, provide money-saving resources, and help you understand your options for getting out of debt.

If you're feeling alone or overwhelmed, working with a certified credit counselor can provide instant stress-relief while giving you the support you need to tackle your financial challenges.

Talk to your creditors

If high interest rates are making it difficult to pay off credit card bills, it's actually not a bad idea to simply ask your creditor for a lower rate. A study found that 76% of customers who asked for a lower interest rate on their credit card were granted a rate reduction. The average reduction was just a little over 6%.

Reach out to your creditors and explain your financial situation honestly. Some creditors may be willing to work with you by offering reduced interest rates or extended repayment terms. This can make it more manageable to handle your debts without bankruptcy.

Use a debt resolution plan

Debt settlement involves negotiating with your creditors to reduce the total amount you owe. It's often the best alternative to bankruptcy for consumers who are already behind on their payments and are unlikely to be able to get caught up any time soon.

MMI's debt resolution plan is a nonprofit spin on debt settlement, with lower fees, more transparency, and less risk than for-profit debt settlement. If repaying your debts in full doesn't isn't viable, a debt resolution plan may be the best way to lower your payments and get you out of debt quickly, so you can focus on rebuilding your finances. 

After exploring other options, it may turn out that bankruptcy is exactly the right choice for you. But it's not something you take lightly. If you're still weighing your options, complete a free online debt analysis. We can help review your situation and provide advice based on your current debt situation. 

Tagged in Bankruptcy, Debt strategies

Jesse Campbell photo.

Jesse Campbell is the Content Manager at MMI, with over ten years of experience creating valuable educational materials that help families through everyday and extraordinary financial challenges.

Recommended Articles

Young woman using smartphone and making purchase with credit card.
Do Debt Differently
With MMI, you can get out of debt 7x faster than doing it alone.
Learn how
Learn more
  • Better Business Bureau A+ rating Better Business Bureau
    MMI is proud to have achieved an A+ rating from the Better Business Bureau (BBB), a nonprofit organization focused on promoting and improving marketplace trust. The BBB investigates charges of fraud against both consumers and businesses, sets standards for truthfulness in advertising, and evaluates the trustworthiness of businesses and charities, providing a score from A+ (highest) to F (lowest).
  • Financial Counseling Association of America Financial Counseling Association of America
    MMI is a proud member of the Financial Counseling Association of America (FCAA), a national association representing financial counseling companies that provide consumer credit counseling, housing counseling, student loan counseling, bankruptcy counseling, debt management, and various financial education services.
  • Trustpilot Trustpilot
    MMI is rated as “Excellent” (4.9/5) by reviewers on Trustpilot, a global, online consumer review platform dedicated to openness and transparency. Since 2007, Trustpilot has received over 116 million customer reviews for nearly 500,000 different websites and businesses. See what others are saying about the work we do.
  • Department of Housing and Urban Development - Equal Housing Opportunity Department of Housing and Urban Development
    MMI is certified by the U.S. Department of Housing and Urban Development (HUD) to provide consumer housing counseling. The mission of HUD is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD provides support services directly and through approved, local agencies like MMI.
  • Council on Accreditation Council On Accreditation
    MMI is proudly accredited by the Council on Accreditation (COA), an international, independent, nonprofit, human service accrediting organization. COA’s thorough, peer-reviewed accreditation process is designed to ensure that organizations like MMI are providing the highest standard of service and support for clients and employees alike.
  • National Foundation for Credit Counseling National Foundation for Credit Counseling
    MMI is a longstanding member of the National Foundation for Credit Counseling® (NFCC®), the nation’s largest nonprofit financial counseling organization. Founded in 1951, the NFCC’s mission is to promote financially responsible behavior and help member organizations like MMI deliver the highest-quality financial education and counseling services.