The right to file bankruptcy is set forth in the constitution. That’s right, it is in the constitution. So the next time you hear somebody say that bankruptcy is amoral or un-American or otherwise “wrong,” tell them to take their opinion to the Founding Fathers.
Bankruptcy is NOT like the debt counseling or debt consolidation programs you see advertised all over the place. Those companies frequently advertise themselves as “non-profit” as if they are somehow affiliated with the government but they are not. What they try to do is negotiate with each of your creditors, usually only credit cards, and get you to make a single monthly payment that covers all of your credit cards. The problem in my opinion is that the creditors are not required to participate in the payment program and it only takes one to “opt out” of the plan and sue you to ruin the whole plan. In contrast, when you file bankruptcy to resolve the debt problems you are under extremely powerful federal protection from your creditors, none of whom can try to come after you if they don’t like what they are getting out of your bankruptcy case (which is frequently nothing at all).