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If you are standing at the brink of a financial crisis, then you may want to consider asking yourself some key questions that can help you decide between debt consolidation and bankruptcy. Bankruptcy is a big step in a direction that could destroy your credit, and debt assistance is a big step towards improving your credit and freeing up cash for future bill payment. But sometimes bankruptcy cannot be avoided, and these are some of the questions you should be asking yourself to decide if you are a candidate for bankruptcy or debt consolidation.

Does your monthly obligations exceed your monthly income by at least a factor of 2? In some cases debt consolidation can only do so much, and when you have monthly debt that is twice as much as your monthly income then you may be in a situation where bankruptcy is an option to consider.

However, you will still want to discuss your options with a debt professional because there still may be a way to reduce your high interest rate debt to the point where it is feasible that you can afford it.

Have all of your credit card accounts gone beyond the point of collection? Even if you have credit cards with a collection agency, a debt expert can still work with you to find a plan that will consolidate all of that delinquent debt under one payment. You can develop a program that will help you pay off that overdue debt, and get the collection agencies off your back.

But if you have allowed that debt to go beyond the point of collection and into the hands of an attorney, then it can be too late for a debt consolidation organization to help you. Your creditors still may accept a settlement that you may be able to work through a debt representative, but when the lawyers start to get involved it could become difficult to reach an agreement.

There are very few situations that a debt consolidation firm cannot help you out with, and the only way you'll know for sure is to make an appointment and discuss your situation with a debt consolidation association. Even if you answered yes to one or more of these questions, you still may be able to avoid bankruptcy with the help of a debt consolidation agency. The only way to know for sure is to make an appointment and ask them for yourself.

Finally, by researching and then comparing several debit consolidation agencies, consumers will be able to identify the agency that meet your specific financial situation, plus the cheapest interest rate the market is offering. Nonetheless, it is recommendable working with a seasoned and reliable debit counselor before even make any decision, this way you will save time through seasoned advise & cash by getting better results in a shorter period of time.

Hector Milla is editor of the Free Debt Consolidation Quotes website – where you can see his top rated debit consolidation service recommendation.

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Tags: Debt, debt consolidation, debt relief, debts