The ongoing Global Financial Crisis unfolding might be a global problem but debt is a mighty personal thing.

There is nothing reassuring about hundreds of thousands of other Australians being over extended on the Debt merry go round, currently running at about AUD$48 Billion. When your line of credit turns into a pile of debt you are on your own as it seems everywhere you turn there is no quick solution - pay up or else!

There are a range of options to deal with your debt problem when your ability to repay debts is limited.

• You can talk to your creditors (always a good starting point) about your situation and ask about a hardship variation to give you time to sort out the problem - this is usually time limited and subject to individual creditor requirements.

• Another option is declaring yourself Bankrupt - There are severe and ongoing consequences with going bankrupt and if you have any tangible assets you can be liable for many years. Even after being released from bankruptcy, subject to your circumstances and your trustee's assessment, your assets may still be sold up to 6 years after you have been discharged. Bankruptcy is not a `Get out of Jail Free' card.

But before you consider bankruptcy, which is an absolute last resort, you should look at the less drastic option of a debt agreement.

The Debt Agreement option was introduced by the government in the mid nineties to help deal with the ever increasing debt problems people were experiencing This has come about due to the relaxed way that financial institutions were giving out credit and to assist where your ability to meet commitments due changes in income such as loss of overtime etc.

A Debt Agreement is a way of paying off your unsecured debts in a relatively short time and within your ability to pay. To help in this process ongoing interest is removed and creditors usually accept less than the full 100 cents in the dollar. All debts are consolidated into a single payment plan usually over a 2-4 year period. This allows you to regain control of your spiraling financial situation and see a light in the tunnel.

Secured debts are still to be paid as these are usually attached to a car or house that could be repossessed.

A Debt Agreement does get recorded on your credit file, as does most of your financial activities, but at the end of the agreement you are released from those debts and all your income is now available - so this is a choice; ongoing debt or being free from debt.