Making the decision to file for bankruptcy may seem like the easy way out of your debts, but it is not always the best choice. This is a very personal decision, and one that is charged with emotion, so before you make it, be sure that you know the facts.
First, bankruptcy is not designed simply as a "way out" of debt. It is designed for those who have no way of paying their debts to have the ability to protect their assets. For some who have no assets, it does not necessarily benefit them. On the other hand, dealing with creditors on a day to day basis is emotionally draining, even if you have nothing for them to take from you, so you may find that filing bankruptcy gives you freedom from that stress as you rebuild your life.
Some people should consider bankruptcy as a way out of their debt. In particular, those who have had their wages garnished should consider it as an option, so that they can get money back in their pockets to use to take care of their families. If you have many debts that are unsecured, such as your credit card debts, bankruptcy may help. Those who have gotten to the point where collection agencies are regularly calling also need to consider bankruptcy. The same is true when the debtor has lawsuits filed against him because of money owed.
On the other hand, you need to know that bankruptcy will hurt your credit score. For those who cannot pay their debts and have not been able to do so for a long time, this may not matter, because their credit is probably already very low. However, bankruptcy will stay on the credit history for up to ten years, so it is not something to jump into if you are facing just a temporary difficulty with your finances.
Also, new bankruptcy laws make it difficult to file for the type of bankruptcy where all of your debts are cleared.