There are a number of different ways in which you can handle debt or let us say that there are various bankruptcy alternatives.
You can always contact your creditors and try to find an agreeable payment option that satisfies both the parties.
For instance, to settle your credit card bills, explain your predicament to the credit card company and request them to provide a temporary reduction of monthly payments, extend the payment period and waive the late charges.
Another option is to request the Consumer Credit Counseling Service to work in tandem with you and your creditors and formulate a repayment plan that is more apt for your situation.
You can also liquidate the assets that have a resale value and apply the proceeds thereof to clearing your debts up.
Another bankruptcy alternative is to combine all outstanding debts into a single loan, whereby payments need to be made only to a single lender rather than multiple creditors.
Reasons Why People Seek Alternatives To Bankruptcy

• When people file for bankruptcy, they need to be prepared for the liquidation of their assets.
  In many cases, the court orders in favor of selling assets such as plots, house or vehicles to clear the debts.
  
• Bankruptcy has an extremely adverse effect on the credit history of an individual.
  Acquiring a loan or a mortgage becomes very difficult when you have such a poor credit record.
  
• After you file for bankruptcy, all control of your finances lies in the hand of the magistrate handling your case.
  He analyzes the information that is received from the Official Receiver and then takes a decision about your fate.
  
• Once you declare bankruptcy, it can hamper your future career prospects.
  Looking for a bankruptcy alternative is therefore advisable in many situations as there are many careers that do not accept individuals who are bankrupt.
  
• Bankruptcy can be rather embarrassing for your social life.
  Having your bankruptcy declared publicly in print leads to many awkward situations.
  

Different Types Of Bankruptcy Alternatives The main alternatives are debt counseling services, debt consolidation loans and out of court settlement with creditors.

• Debt counseling services: These services help you in consolidating monthly payments and obtaining interest reductions on unsecured debts.
  However, debt counseling also can have a negative impact on the credit rating.
  
• Debt consolidation loans: A second option is by borrowing against the equity of one's home to pay the credit card debts.
  While executing this option, ensure that you have adequate equity as losing your home would be far worse than being unable to pay credit card debts.
  
• Out-of-court settlement: These settlements should be handled with the help of agencies that will help you in negotiating with your creditors.
  Professional help should be taken while choosing this bankruptcy alternative as the negotiations need to be handled with care and tact.