If you find yourself in the situation where it is not possible to repay your debts, consider the following two steps to recovery:

Step 1: In spite of avoiding your situation you'd be way better off by taking some aggressive steps to solve it. If you have already reached the point where you cannot keep up with repayments, it is VITAL that you inform your creditor about it and explain what's going on. This is your first step to freedom and if you contact your creditors first before they contact you, you'll reassure them you are taking your situation seriously and have taken responsibility.

Don't delay, contact your creditors early and never ignore letters from your creditors; this kind of action can make them furious. They may even try to take you to court early before you can file a bankruptcy case. Always remember that they do not want to take any legal action, unless your lack of communication and action force them to do so! Talk seriously with them as your creditors will only be considering a court case as a final option. All court actions are time consuming, unpredictable and costly; therefore it is only the last option for them.

Step 2: Repayment is a question of mathematics and a very simple commercial decision for your creditors. You see, they know it's better for them to take their money back with mutual commitments (lower interest rates) rather than going through court procedures. Legal procedures usually benefit nobody, except accountants and lawyers. And most lenders realize this! If they are offered a small payment schedule over a longer period, most lenders will gladly accept this option. In this case they can get their money back rather than the option of bankruptcy. There are many brokers out there who will help with situations like this and begin the negotiations.

Prepare a budget, and confirm how much you can afford to pay towards your debts each month, than contact your lenders and offer them your idea - either on your own or with the help of a credit card debt consolidation expert. If you decide you'd like help simply compile a list of all your debts and give one of your local debt consolidation experts a ring. They have their fees but will already know who to call and will save you a pile of time since they do credit card debt management all the time. They will know the fastest and best way to eliminate credit card debt and get you back into a situation you can afford.

Your attitude towards your debts and your fiscal situation can take off some unneeded pressure. Be honest with yourself and your creditors - as it will be your advantage in such cases. Never choose the option of bankruptcy, as it always has undesirable legal restrictions that could come back to bite you down the road. Above all try to have fun, 2 step a bunch, smile more than normal and no matter how big the mountain of debt just know you can beat it with small bites, one at a time!