While bankruptcy should never be your first choice, if you find yourself hopelessly in debt with no way out, a Chapter 7 liquidation may be the most appropriate step to take.
Chapter 7 is a complete discharge of all of your unsecured debts. Each state has particular bankruptcy laws and rules that you must follow when proceeding with a Chapter 7 case.
The biggest advantage of filing a Chapter 7 Bankruptcy is that it gives you a chance to start over again. The law does not send debtors to prison, but does require one to take an educational class in financial responsibility. Once all of the paperwork has been filed and approved by a Bankruptcy Trustee, your case will usually be approved. The entire process usually takes anywhere from 3 – 6 months to complete.