Debt consolidation can help you avoid bankruptcy and it's a much more responsible decision to make. With bankruptcy your creditors don't ever get the money they are owed and you or your business will have a credit mark that will follow you for years. If you consolidate your debt by taking on one new loan, you ease the burden of phone calls and bills to pay and you are left with only one payment. It is your debt and your responsibility. While it may seem easier to give up and declare bankruptcy, you are further ahead with debt consolidation and you can start repairing your credit right away.