Filing for bankruptcy can be the right move in some circumstances, but often it is not the right thing to do if the main reason for filing bankruptcy is to escape credit card debt.
UNPLEASANT FACTS ABOUT BANKRUPTCY.
1. Your credit rating will take a severe beating. This is not the end of the world, and although you may be able to obtain credit in the future, it will be offered to you only at very high interest rates.
2. You will lose almost all of your assets (except those necessary for your work). In a Chapter 7 bankruptcy proceeding, your assets will be sold off to pay your creditors.
3. You could lose control of your affairs. Even though you might file a petition for bankruptcy under Chapter 7 (seeking a complete discharge of debts), a creditor may be able to force a conversion of your petition to a Chapter 13 case. If that happens a trustee will be appointed to oversee your income and expenditures to make sure that certain creditors are repaid.
4. Not all debts are dischargeable. Debts for student loans, child support, taxes, and certain other things are generally not dischargeable in bankruptcy proceedings.
5. Non-economic effects. A bankruptcy filing, even if it ends well, could disqualify you from successfully applying for certain jobs, could cause the break-up of a business in which you are a partner or a member, or could be a valid reason for a landlord to deny you a lease.