Here’s a website that explains what’s technically involved in bankruptcy and which has some information about what courses of action you can take. I hope this helps.

Good luck!

Don’t forget to get consumer credit counseling before you file your case and to take your financial management course after. Otherwise, your case could be dismissed or you won’t get your discharge – the elimination of all of your debts.

Points against bankruptcy: It will be on your credit report for 10 years. It won’t ruin your credit for 10 years but it will result in credit costing more for you if you need it. Your credit will get progressively better in the years following bankruptcy if you keep your agreements.

Bankruptcy doesn’t discharge all debts, such as student loans, taxes less than 3 years old (that’s an oversimplification but good enough for discussion purposes), domestic support obligations and many others.

Bankruptcy costs time and money. You can plan on something close to $2000 in most large cities and something less than that in smaller towns/rural areas, plus fees and expenses of another $360 or so.

Some people find bankruptcy to be an emotional experience.

Once you file chapter 7, you can’t file another one for 8 years. You can’t file a chapter 13 and get a discharge for 4 years after you file. So if things get worse, you may be out of luck.

Your non-exempt property will be sold to satisfy debts in chapter 7.

Things in favor of bankruptcy:

You can discharge dischargeable debts.
You can stop harassing creditors/bill collectors
You can keep your exempt property in chapter 7.
You can keep all your property in chapter 13, including property given as security so long as you continue to pay the secured debt.
You can catch up on mortgage arrearages.

There are other advantages to bankruptcy too

It will be hard to get credit before your 2 year filing anniversary. I recommend pre-paid credit cards and pre-approved credit accounts(think Fingerhut here) to get yo on the right track.