For those who are struggling with debt, it may be possible to either consolidate that debt or discharge it through bankruptcy. In some cases, it can be helpful to contact an accredited credit-counseling agency to review debt consolidation options that may be available.

Debtors who have good credit may be able to transfer some or all of their credit card debt to a new credit card with a lower interest rate. It may also be possible to get a home equity line of credit to consolidate debt. One final debt consolidation option may be to create a debt management plan with the help of a credit counselor. Such a plan may make it easier for debtors to make payments that they can afford to creditors, and it may allow for a lower interest rate.

Individuals who wish to seek debt forgiveness may wish to file for bankruptcy instead of consolidating their outstanding accounts. Debt that is discharged through bankruptcy is not considered to be taxable income as opposed to debt forgiven by creditors. For example, if a debtor had $10,000 of credit card debt forgiven by the credit card company, that person would have to claim $10,000 as income on their tax return. Bankruptcy may also be best for those who do not have the resources to pay back the debt in a reasonable amount of time.

Individuals who are not sure whether they can repay their debts may wish to contact a bankruptcy attorney to discuss their situation. While consolidation may be helpful to some, filing for bankruptcy may discharge debts quickly, which may allow an individual a fresh financial start. Once debt has been discharged by a judge, creditors cannot continue to make attempts to collect debt.