Thanks to bankruptcy laws, people and businesses who have experienced tragic financial collapse can start over with a clean slate. By filing for bankruptcy, these entities may be relieved of their past debts, so they can have the opportunity to reorganize their finances sans the harrowing pressure from creditors and debt collection agencies.
But as appealing as a clean financial slate can be, this is not to say that filing for bankruptcy is void of any downsides and consequences. Bankruptcy can have a significant impact on your credit reputation, so you better look at all sides properly before deciding to sign your debts away. And thus, begs the question: When to file for personal bankruptcy, and why should I do it?