Instead of simply delaying the payment of your bills, you can try to negotiate with your creditors and see if they give you a break. They don’t want you to file for bankruptcy, because if you do, they lose everything.

In some cases, creditors accept a flat-rate payment for only part of what you owe. In other cases, they will work out a payment plan with you, so that you can make repayments little by little. Then you can use the money you save on these invoices to cover other expenses that are more urgent. There is no guarantee that lenders will work with you, but you have nothing to lose by asking.

If your creditors are not willing to work with you directly, you can try to settle your debts in other ways. Some options include:

  • Credit Counseling . A credit consultant can help you set up a debt management plan or DMP. Under these plans you make monthly payments to the credit consultant and you pay your debts. In some cases, a DMP can lower the interest or fines that you currently pay. However, DMPs also come with a start-up fee and monthly maintenance costs, which could cost you more in the longer term.
  • Debt consolidation loans . Sometimes you can make overwhelming debts more manageable by taking out a debt consolidation loan. These loans roll all your existing debts into one loan with a lower interest rate. This gives you fewer invoices to keep and a more manageable monthly payment. The interest on debt consolidation loans varies from 5% to 25% APR. Moreover, these loans often contain an origination fee of 1% to 6% of your total debt.
  • Debt settlement. Debt settlement companies negotiate with your creditors on your behalf. Their goal is to get lenders to settle for a lump sum that is less than what you actually owe. You pay this bill by depositing a fixed amount into a bill each month, just like you do with a DMP. However, companies with debt repayment often demand high costs for this service. They also often encourage you to stop paying your bills while they work on a settlement. This means that if the settlement does not work, you owe several late fees, leaving you in a deeper hole than ever. And if you manage to pay your debts, the Internal Revenue Service treats the amount of the debt canceled as income, so you have to pay tax on it.