By RUTH BROCK / Guest Columnist

Are you looking for a quick fix for your debt?

Consumer debt is at an all-time high. It does not matter whether your debt problem is the result of an illness, unemployment or simply overspending, it can seem overwhelming. In your effort to become solvent, be on the alert for advertisements that offer seemingly quick fixes.

These misleading ads pitch the promise of debt relief. They rarely say relief may mean bankruptcy. Although bankruptcy is one option to deal with financial problems, it is generally considered the option of last resort. The reason is its long-term negative impact on your credit rating.

Bankruptcy information (both the date of your filing and the later date of discharge) stays on your credit report for 10 years, and can hinder your ability to get credit, a job, insurance or even a place to live.

The Federal Trade Commission (FTC) cautions consumers to read between the lines when faced with ads in newspapers, magazines or even telephone directories that say: “Consolidate your bills into one monthly payment without borrowing” or “Stop credit harassment, foreclosures, repossessions, tax levies and garnishments.”

You will find out later that such phrases often involve filing for bankruptcy relief, which can hurt your credit and cost you attorneys’ fees. If you are having trouble paying your bills, consider these possibilities before considering filing for bankruptcy:

Talk with your creditors to work out a modified payment plan.

Contact a credit counseling service. These organizations help you develop debt repayment plans. Such plans require you to deposit money each month with the counseling service. The service then pays your creditors. One such agency is the National Foundation for Credit Counseling (NFCC) and can be reached at 1-800-388-2227 or by visiting http://www.nfcc.org.

Carefully consider a second mortgage or home equity line of credit. While these loans may allow you to consolidate your debt, they also require your home as collateral.

For more information on this, as well as other financial topics, contact Ruth Brock, regional extension agent for the Alabama Cooperative Extension System, at 612-4066 or by e-mail at mailto:brockru@aces.edu