Arrangements can be made with secured or unsecured creditors. Factors which the secured creditor will look at include the rate of depreciation, past payment history, and resale amount on repossession. Many unsecured creditors are receptive to some arrangement which will allow them to be repaid in a reasonable amount of time. They do this because if the debtor files for bankrukptcy, chances are they will receive little. By working with the debtor, they will receive most or all of their money back. 

As long as the debtor meets the new arrangements, the debtor is allowed to keep their property while working with the creditor. In addition, the debtor is allowed to keep their credit record clean through a properly structured work out. A bankruptcy remains on your credit report for ten years, while arrangements which are kept up to date should appear as a current account. 

The closer a debtor is to current with their account, the more likely a creditor will be enter into some modification or arrangement. Some creditors will accept a greatly reduced lump sum payment or will demand an up front payment before entering into any arrangement. This may mean that the debtor will have to incur additional debt through freinds and family, or pension plan loans. The idea is to pay off a high interest, currently due debt with one that carries little or no interest with low payments due at some time in the future. 

There is nothing a debtor can do to force all of their creditors to accept terms which the debtor is offering. Hopefully, a sufficient number of creditors are willing to deal with the debtor to allow the debtor relief. If too many creditors are unwilling to go along or if the largest creditor vetos the arrangement, the debtor may have to abandon this strategy and look at other options. Just because a debtor tries one approach which fails, the debtor is not precluded from attempting other strategies to solve their financial problems.