Filing for bankruptcy is a difficult decision. It affects your credit, your financial future and your pride. Every individual financial situation is different, and depends on the amount of debt and the ability to pay it back. If you are someone who has exhausted all of your financial resources and have no other options, filing for bankruptcy may be a viable solution.

But before you call the nearest law office or sign the final papers, here are a few important things you need to know before you file:

• Certain debts are unforgivable. Certain kinds of debts can’t be forgiven under bankruptcy. These debts are required to be paid back regardless of financial circumstance. Alimony and support obligations, student loans, drunk driving repayment, and debts acquired through financial fraud are unforgivable.

• There are alternatives to bankruptcy. There are plenty of alternate strategies to battling debt. Loan consolidation is often a good and reasonable solution. Combine all of your debts into one single loan so that you will only be making one payment to one lender per month. Contacting your creditors and asking for their cooperation can also result in better pay arrangements and/or options. Most creditors are willing to work with you rather than against you because their ultimate goal is to recoup the money that is owed to them. There are also many credit counseling services available nationwide to help assist you in overcoming financial problems or difficulties.

• Different states equal different laws. Bankruptcy laws differ from state to state. It is vital for you to research the bankruptcy laws that are applicable to the state which your reside. Do your homework or hire a lawyer who specializes in bankruptcy and can research the laws for you if you feel unprepared to do so. You’d be surprised at how much information you can gather just by going on the Internet or by visiting your local library.

• What is Chapter 7 bankruptcy? Chapter 7 is the “end all, be all” to financial debts. This means that you are essentially writing off your debts with absolutely no intention of paying them back. Unfortunately, by filing for Chapter 7, you will also severely hinder your ability to secure any credit for at least three years. You should not file for Chapter 7 if you anticipate any need for credit in the near future.

• What is Chapter 13 bankruptcy? Chapter 13 is actually a renegotiation of your debts with the understanding that you will, in fact, be paying them back in a timely fashion. Once your Chapter 13 debts are satisfied, you will be able to once again apply for credit. Chapter 13 “survivors” are usually able to secure a loan within as little as two years after reestablishing his or her credit reputation by maintaining an excellent repayment schedule.

If you are considering bankruptcy, it is extremely important to take all of this information into consideration before making the decision. Bankruptcy is a serious step, one that shouldn’t be taken lightly.