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If you are being hounded by debt collectors, don’t know of any realistic way that you can pay back or negotiate debts, and expect that your IOUs will continue to mount, bankruptcy could be your path to a fresh start. “Because of the stigma, I find that many people actually wait too long before they seriously consider this option,” says Gerri Detweiler, director of consumer education at Before going this route, however, you’ll want to make sure you’re prepared for all the consequences.

There are two forms of bankruptcy, Chapter 7 and Chapter 13.

In a Chapter 7 bankruptcy, the most common form, your debt is completely wiped out. The bad news is that anything you own, such as your home or car, may be sold and the proceeds used to repay creditors. The record will remain on your credit report for 10 years, and could hamper your ability to get any kind of loan – though you can get approved for secured credit cards (in which you put down money as collateral up to the credit limit).

Chapter 13, by contrast, is better known as a reorganization. Your debt doesn’t go away. Rather, a counselor will work with you to figure out how you can repay your debts within 3 to 5 years. The advantage is you can keep your home and car, and there is less damage to your credit report.

Read next: Which Debts Should I Pay Off First?

If you think may need to file for bankruptcy, your first step should be to contact a consumer bankruptcy attorney. Find one in your area at