Before you make the decision to declare personal bankruptcy, there are a number of things you should familiarize yourself with and take into consideration.
For example, ask yourself prior to your decision to declare personal bankruptcy, whether you have absolutely any viable alternatives.
If you do not have any other way to resolve your situation, then you should probably go ahead.
However, you should note that in 2005 there were some fairly controversial changes made by Congress to bankruptcy law.
These changes were brought about by extensive lobbying by the credit industry.
While many people who were eligible before the changes still are, it is now substantially more complicated to declare personal bankruptcy than it was.
Essentially, the changes have been designed to really make absolutely certain that anyone filing really has a genuine need and definitely cannot afford to repay debts, before allowing them to declare chapter 7.
Chapter 7 bankruptcy is what most people consider to be 'bankruptcy' whereby many debts are simply wiped out without any need for a repayment plan.
The changes of 2005, however, mean that before you will be able to declare, your income will be considered.
If your income is below the median for the state in which you are filing, you should be granted declaration.
However, if your income is higher then you will be required to go through a complex and detailed means test to document your finances in full detail.
If your means test deduces that you are not in full need of chapter 7 bankruptcy, then you can be ordered to file chapter 13 bankruptcy, which essentially works out a repayment plan for you for the outstanding debts you have.
And though this will often mean an eradication of outstanding service charges and a lower interest rate, you will still have to pay back outstanding debts.