Being insolvent is one of the worst conditions a person could find himself in. The threat of foreclosures, or losing one’s home and valued possessions looming over one’s head can cause sleepless nights. This predicament would force a person to grasp any possible solution out there. However, if all possible solutions fail to deliver the desired outcome, the last course of action is to opt for bankruptcy.

If you have tried credit counseling and you still are not able to pay your bills, and if you've exhausted your savings, then it is better if you consider the filing of bankruptcy. 

Bankruptcy is considered as the last debt management resort due to its long lasting cause.  Bankruptcy will stay in a person’s record for a minimum of ten years.  Not surprisingly, this would affect his future financial standing.  Lenders will have to think twice before extending credit due to his being a potential credit risk.  Getting credit cards and mortgages will be hard if you have this on record. 

Bankruptcy records are easily reachable for the reason that they are published and also could be viewed on line.  This far reaching result would be detrimental to future financial dealings and employment.  An individual who declares bankruptcy should be prepared for the consequences – face the rejection and ridicule of the society and associates, being branded as a disaster and sometimes judged as culpable and dishonest. 

With a bankruptcy order the debtor can expect to have all his bank accounts closed.  Credit cards will be closed as well.  On a positive note, closing of credit cards will be helpful since credit cards can be one of the reasons for the bankruptcy. 

Contrary to the notion that bankruptcy would give a distressed debtor a new slate, not all debts could be discharged or written off.  Instances of this include student loans, unpaid taxes and child support. 

On the positive side, bankruptcy will give the debtor peace of mind, will free him from the harassment of creditors and will offer him a opportunity to have a fresh start.  Stress in coping with numerous creditors will be eliminated because when the bankruptcy order is made; the appointed trustee will do the administration and the payment of the debts. 

A bankruptcy will keep the creditors from filing collection actions.  Creditors will be prevented from foreclosing, repossessing and garnishing your assets.  In certain states, bankrupt individuals are allowed to keep the house, the car and other possessions and a reasonable amount of cash to live by.  The main reason for this is to lessen the risk of the bankrupt person to go bankrupt all over again. 

However, filing bankruptcy can become a "habit”.  Lots of filers have been noted to file again.  This can be attributed to the lack of proper finance and debt management.  People who have experienced financial downfall would commit the same errors again and will ultimately grab the last resort to get them out of the difficult financial situation...once more. 

Repeat bankruptcy filers are highly advised to get proper counseling and to learn how to manage debts and finances effectively.