Declaring bankruptcy is not usually an easy decision for anyone, and it's not something to decide on lightly. When you declare bankruptcy, this can affect your credit rating for many years to come and make it difficult to get a loan or any line of credit; in some cases, a bankruptcy might affect your ability to qualify for certain jobs. However, there are times when it's good to think about bankruptcy as an option as it can mean relief from overwhelming debt. A bankruptcy attorney can be the best person to advise if your situation is dire enough to warrant this choice, but note a few considerations you might keep in mind that can help you make the decision.
Is your debt interfering with your ability to care for your daily necessities?
You may not like paying on old loans and credit cards as that's money you could be using for discretionary spending, but if your loans and debt are interfering with your ability to pay your rent, car insurance, and medical insurance, and are even so costly that you scramble to buy groceries every week, it may be time for bankruptcy. This is especially true if you've made all the cuts you can when it comes to your daily necessities and can't reduce your spending any more.
Note how many years it would actually take you to pay off the debt
If you could "buckle down" and pay the amount you owe on loans and credit card bills for a year or so and have them paid off, you may not be the right candidate for bankruptcy. However, if you realize that it would take you many years to pay off those loans, or that they're so dire that you are simply going to be paying on the interest alone for many years, bankruptcy might be a better option. This can mean not facing all those years of payments that won't help much to get you out of actual debt anyway.
If you're not concerned much about your credit rating for the time being
If you already have a car that you know will last many years so that you won't need a car loan anytime soon, already own a home or live with someone else, you might not be worried about the immediate damage to your credit. Consider this carefully, however, as you might not need a loan now but your situation may change in a year or so. But if you know the debt relief you get from bankruptcy is worth the "black mark" on your credit report, it might be the best option for you. Talk to a lawyer who specializes in insolvency in bankruptcy for more information.