There are many downside factors in a bankruptcy, so do think seriously before you go to the court.

Bankruptcy cannot clean up a bad credit record and will be part of your record for up to 10 years. You may find it difficult or impossible to get a mortgage or credit card while your bankruptcy appears on your credit report. Certain debts cannot be forgiven by bankruptcy proceeding, such as taxes, alimony, child support, student loans and some property settlements. Debts that result from fraud, willful or malicious injury, certain fines or penalties and claims incurred from driving under the influence of alcohol or drugs also cannot be discharged by bankruptcy.

However, laws forbid discrimination against people who have declared bankruptcy. You can not be denied a job, be denied or evicted from public housing, or be denied a driver's license just because you filed for bankruptcy.

Although bankruptcy can relieve the pressures of overwhelming debt by providing a fresh start, it should always be seen as a last resort, after other attempts to solve a financial crisis fail. It's probably a good idea to discuss your situation with a credit counselor or a lawyer to see whether you really need to file bankruptcy or whether an agreement can be reached with your creditors.