Bankruptcy is a federal law, the idea is to give an honest, but unfortunate debtor a fresh start. What can happen under a Chapter 7 Bankruptcy, is a person either gets released from the dischargeable debts; or they are able to reduce their debts to a manageable level and maintain a payment plan for a 3-5 year period under Chapter 7.

The idea is that people do not get a free ride, but they encourage a certain amount of risk taking and the reasons why people file. Are you trying to keep your debts current, but are borrowing money for one card to pay another? That you are using your savings to pay your debt and you realize that your savings will run out and it makes more sense to file rather than wait for that period of time.

The essentials of your life are not being able to be met because of your current debt. You have defaulted on credit card debt; dealing with debt collectors who are not willing to negotiate; there maybe defaults on credit card debt; judgments on credit card debt; current civil suits going on. The Credit Counseling Agencies that you have had contact with have not followed through; have not been reputable or unable to reduce things.

You have lost a job; lost hours; lost or had a reduction in income; incurred substantial medical bills because of an illness or accident; behind on house or car payments; facing foreclosure; repossession; caring for an elder; caring for an adult child; caring for a spouse or other relative that has serious medical needs. You had a business that failed or is failing.