Sometimes all the best ideas just are not enough. You have too much debt, you owe the IRS for back taxes, you are behind on the mortgage payments … and you get sick. It’s not easy but virtually all debt can be negotiated with payments over an extended period. Even large obligations on income taxes can negotiated so that you have more time to pay your debt. However for this, you will need to prepare a detailed budget showing all sources of income and all payment obligations, including utilities and taxes. It’s a painful process but one that is necessary to convince your creditors that it is in their interest to negotiate a payment plan with you.
Even then sometimes, that is not enough. For people in deep financial trouble, personal bankruptcy allows a way to restart their financial lives.