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Borrow from your parents, make lifestyle changes, work from home -- bankruptcy is a last resort. Far from wiping your slate clean, you'll have a huge dark mark on your credit. It’ll torpedo every application for a mortgage, credit card, car loan, and school loan. Employers can check credit reports too. Plus, if your income is over a certain amount post-Chapter 7, you still have to pay certain bills. Lenders would rather see you making payments on your mountain of debt than filing for bankruptcy. If you really can’t make it work, visit a bankruptcy lawyer first -- a legit one will consult for free and help you weigh all the factors.

Nestperts Brett Graff, The Home Economist; Dan Solin, author of The Smartest Investment Book You'll Ever Read

-- The Nest Editors

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