A: Bankruptcy should be used only as a last resort. For example, someone who has only one debt that cannot be paid in time should consider alternatives such as working out a more reasonable repayment plan with the creditor, selling something to pay off  debt, trying to negotiate a lower amount, or temporarily taking on a second job.

Although bankruptcy may seem like an easy solution, remember that it will stay on your credit record for at least seven years and in the meantime you may find it extremely difficult, if not impossible, to get a mortgage or buy a new car. If  a major catastrophe really does strike within that seven-year period, you will not be able to file for bankruptcy again.

Another option to regular bankruptcy is a wage earnings plan, which requires that you pay each of your creditors back over a period of time at a reduced amount. The plan must be approved by the bankruptcy court.

A better option may be consumer credit counseling (such as offered by Consumer Credit Counseling Services). This is a national organization that provides financial counseling to people with debt problems. A counselor will work with you and your creditors to come up with a repayment plan.