Filing a Bankruptcy or Debtors Court case is one of the best ways to deal with your debt problems. Bankruptcy and Debtors Court are often better alternatives than withdrawing money from your 401K or other retirement accounts because certain retirement accounts are protected from creditors. Bankruptcy and Debtors Court are often better than taking out another loan or a second mortgage since that can create more debt. In addition, debts discharged in Bankruptcy or Debtors Court are tax free. Unlike some debts that creditors write off, you do not have to pay tax on debts that have been discharged in Bankruptcy or Debtors Court.