Is bankruptcy my only option if I default on a loan?

Generally, the more creditors you owe the more likely you will need to use bankruptcy for relief. The reason for this is that despite your best efforts to resolve delinquencies with all of your creditors any one creditor can be a “spoiler” that could ruin your settlement efforts. Frequently, however, especially in commercial settings, debtors have only one or two major creditors. In those situations it makes sense for debtors to try to negotiate forbearance or other loan modification agreements with their primary creditors. These agreements can provide substantial relief but at a price, as described in this article.