Most people look at the declaration of bankruptcy as an absolute last resort when they’re looking for a way to ease their financial problems. In many cases, it’s a simple matter of morality — most of us want to honour our commitments and feel very badly when we can’t. Who want to feel like a deadbeat? Bankruptcy can also mean the loss of assets, and will mean having to rebuild your credit slowly, over time.

So why do people do it?

When people become insolvent — that is, they have more debt than they can afford to repay — it can mean sleepless nights, harassing phone calls from creditors, and the continuing accumulation of debt if you find yourself using credit to pay for necessities like groceries or utilities. Bankruptcy can take care of all of these problems in a few simple steps and a few months of accountability to a trustee.

Bankruptcy offers a clean slate and a fresh start, and for some people, that’s what it will take to get them back on their feet and in the right frame of mind to face the future.

There’s often more to their situation than just badly handled credit. Many people are forced to consider bankruptcy because they lost their jobs, got divorced or separated, lost property that was insufficiently insured, needed legal counsel, or any one of a variety of legitimate reasons why otherwise responsible people find themselves insolvent.

The bottom line is that the decision to declare bankruptcy is a very personal one, one that needs to be made only after careful consideration and consultation with a professional credit counsellor. If, after careful consideration, you and your counsellor decide that bankruptcy is the right option for you, proceed without beating yourself up. The option exists for a reason. Use your bankruptcy as a lesson, and learn the skills you need so you never have to face financial problems again.