Bankruptcy is a legal option for individuals and businesses that allows most debts to be forgiven after repaying a portion of the debt owed to creditors in the bankruptcy proceeding. However, filing for bankruptcy can have lasting consequences on your credit score and your ability to obtain credit. Therefore, you should carefully weigh your options before choosing to file for bankruptcy.

It may be time to discuss your financial situation with an experienced bankruptcy attorney if you have tried other methods of settling or reducing your debt with little to no success. For example, some creditors may be willing to negotiate with you regarding how to settle your debt in order to avoid a bankruptcy filing. Unsecured creditors, or those whose debts are not secured by collateral like a house or car, are likely to get far less from you in a bankruptcy proceeding than if they negotiate with you one on one.

Also, you may want to consider filing for bankruptcy if you have tried credit counseling, but with little to no results. Credit counseling services can sometimes be more successful when it comes to negotiating with your creditors about your debt than you may be on your own. However, if your creditors are unwilling to budge on the amount of debt that you owe, you may have little choice but to file for bankruptcy. In addition, if your wages are being garnished, filing for bankruptcy may stop the wage garnishment. However, you should discuss the particular facts of your case with a bankruptcy attorney to determine what is best for you.