When your debts keep accumulating and are getting out of control, then declaring bankruptcy may just help get you out of this mess. When you take this step, it is a legal indication that you are unable to repay your debts. Once you declare that you are bankrupt, the law stops the creditors from collection of their debts or harassing you. This buys the debtor time to organize himself. Often, most of the debt is written off and the debtor is only required to repay a small percentage.
Declaring bankruptcy also gives one a fresh start. Since you are now debt free, you have a chance to rebuild your finances and avoid debts. When you decide that this the best option for you, you have to be aware of the consequences.