However bad your debts are, none of us would willingly choose to declare bankruptcy unless there was no other alternative.
 Fortunately for most people, there are alternatives, with far less drastic and far reaching consequences than bankruptcy has.
   When your debts are really significant, however, you may have already looked at common alternatives like debt consolidation and found that your situation is too serious for that to help.
 For debt consolidation, or debt management as it is also known, you need to have enough spare cash each month to make a regular payment towards your debts.
 If you do not have enough money left over to do this, it is easy to feel that you have no choice but to file for bankruptcy.
If you are in that tricky place where your debts are too serious for consolidation but you do not want to declare bankruptcy, the solution to look at is almost certainly debt settlement, which is also called debt negotiation.
 This is an approach used to deal with very serious debts, because it involves getting large portions of your debts written off.
 Only by doing this can you bring your debts down to an amount that you can afford to repay.
  Debt settlement is very common in the US, though for UK residents there is a scheme called an IVA, which achieves the same result and is provided as an alternative to bankruptcy.
 An IVA is a formal agreement that normally lasts up to five years, after which any remaining debts are written off.
What happens in debt settlement is that you work with a debt settlement company, who provide an expert debt advisor to negotiate with all your creditors on your behalf.
 Instead of you paying your creditors, you just make one monthly payment into a special account, and the negotiator deals with your creditors to agree settlements on your debts.
 As the money in your account builds up, it is used to pay off the creditors when agreements are reached.
The principle approach with the creditors is that you cannot afford to pay back all that you owe, so would they rather have something back or nothing at all? The agreements are usually for a prompt or up front payment in exchange for a substantial reduction on the amount to be paid back.
 It is not unusual for the amounts written off to be over half the value of the debt.
 The settlement company need to be paid for their services, but this is usually a percentage of the amount they manage to save you, so you are still much better off.
The debt settlement process I have outlined is how it will work when it is done well.
 There are plenty of companies who will always do it well, but it is worth being aware that there are many other companies who are not ethical in their approach, with the result that some people have paid them money and not had their debts settled.
 It is therefore important to understand how to ensure you find only the best debt settlement companies.
To wipe out your debts you need to be sure of finding a good company to work on your behalf.
 The safest system is to look at a shortlist of recommended organisations that you know to be well established, ethical and reputable, who can show that they have already helped many other people out of debt.
 In addition to this you should always take the precaution of applying to at least two, so that you can compare what each one offers you.
 This will also give you the opportunity to get a feel for how they work and who you would be more comfortable with.