If you are in a financial hot water then what need to do is to eliminate your debts as fast as you can. Mostly when consumers fall into arrears they decide to file for bankruptcy as they think that that will solve all of their problems but you should be aware of the fact that now bankruptcy laws are changed and if you filed for bankruptcy you are going to face bigger troubles. Your credit reports will have a very negative impact, your credit scores will be reduced a lot and you cannot get employment or any type of loan for the next seven or ten years.
There are other legal tactics present too which you can opt for and there would not even be a scratch on your credit reports. Following are those tactics:
Forming A Budget
Once you have decided to eliminate your debts, take control of your expenses, they should not be more than your income. First list all of your sources of income, and the expenses which are fixed like rent, mortgage payments or insurance premiums. Then list those expenses which are not so necessary like clothing, entertainment etc. List even those insignificant expenses. Then compare each of them and see how to balance. What you should eliminate and what you must pay. This way you will increase your savings and those savings will help you get rid of your debs.
Talking To Your Creditors
Right now there are many consumers which are facing debt problems like you. Creditors are well aware of this fact and they do not want their customers to file for bankruptcy because if they did so they would gain nothing. So you should try talking to your creditors, explain them why you are having trouble in paying to them. And if they can arrange a new re-payment plan in which the debts are lowered down or time period is extended. Show them some proves and then they will accept your deal, but if they agree to reduce only a small amount of arrears then you should still negotiate with them firmly and there will come a time that they will provide you with a good reduction rate.
Other than these ways there are other simple ways also through which you can gather more money like doing part time jobs, borrowing from your retirement account turning an unsecured debt into a secured one etc.