It would be best if you considered Bankruptcy when: 1. Your financial situation is not improving.  If you see the balance on credit cards going up or not reducing, your current situation is not improving. Bankruptcy will help you discharge these debts and allow you to have a fresh start. 2. When your family depends on you.  If you have family members who rely on you for support, you must have funds necessary to cover the essential expenses such as health insurance, not your unsecured credit cards. Bankruptcy lets you prioritize what is essential. 3. If you might lose your home to foreclosure or your car is in danger of being repossessed. Filing for Bankruptcy can help you avoid repossession and allow you to keep your home. 4. If you are worried about retirement.  If you have withdrawn funds from your retirement account to pay off your debts, you are doing yourself more harm than good. A bankruptcy filing is an option to discharge your unsecured debts while protecting all of your retirement accounts, as these funds are typically exempt from creditors.