In the past, the most popular way to solve your problems with a lot of debts and creditors was to declare chapter 7 bankruptcy. This enabled you to freeze and dissolve your debts while still maintaining your home and car from foreclosure. Depending on the state that you are in, there are many different rules to going about this strategy, but the problem lies in that it is a bail out that may not be too healthy for the economy as well as for your status at the credit bureau. The effects of filing for bankruptcy can be chilling because this will greatly restrict your ability to take out more loans in the future and you will definitely have trouble with getting credit cards.
This is the reason that there have emerged bill consolidation programs that help you out to pay off your loans in easier and cost saving ways. Though this will still mean that you have to pay off your loans and this whole strategy will take a lot of time, in the end you end up with lower interest rates and net you a lot in terms of savings that you could get. The best thing about it is that you will still maintain a somewhat good image with the bureau and after you have paid off your loans, then there is little to stop you from getting more credit and having subsequent loans approved. This gives you more financial flexibility for any emergency that may be forthcoming in the future.
In the end, the goal of both options is to help you become debt free. And in the growing fears of a financial crisis that is sweeping the whole country these past few months, this goal is a necessity for anyone. So make sure that you are able to win back your freedom from debt and live a financially comfortable life once again.