There may be nothing worse than realizing that you can't afford to pay your debts. Unfortunately, it doesn't take much to reach that point. All it takes is a medical emergency, death in the family, loss of job, or other unexpected calamity, to plunge you headlong into financial ruin. When that happens, you have two choices, you can continue to struggle under the burden of debt, or you can file for bankruptcy protection. Many people choose bankruptcy as a way to get out from under insurmountable debt. If you've chosen to file for bankruptcy, there are some steps you'll need to take that will help you avoid trouble with the process. These steps will also help you avoid additional stress and headaches associated with your debt.

Choose the Right One

When it comes to filing for bankruptcy, it's crucial that you choose the right one. There are two bankruptcy chapters that relate to individual debt – as opposed to farm debt or business debt. If you're going to be filing for individual debt relief, you'll be able to choose between chapter 7 and chapter 13 bankruptcy protection. Chapter 7, which is the fresh start bankruptcy, allows you to walk away from all your allowable debt. However, you'll be required to relinquish all your non-exempt property. This is best for individuals who have little, to no, income. Chapter 13, which is a reorganization bankruptcy, allows you to keep your property. However, you're required to enter into a repayment plan that will allow you to repay your creditors over a certain period of time.

Don't Wait Too Long

Once you decide to file for bankruptcy, you shouldn't wait too long before filing. It may be tempting to wait as long as possible, however, waiting too long can give creditors the opportunity to obtain further judgments against you. To protect yourself from further action, it's best to file for bankruptcy protection as soon as you realize that you have no other way to get out from under your debt. It's also important that you contact each of your creditors as soon as you file for bankruptcy. That notification will stop all action, including court proceedings and harassing phone calls.

Know That You Can Rebuild

You're probably worried about how a bankruptcy will affect your credit rating. It is true that a bankruptcy does take a chunk out of your credit rating. However, the debt that you're drowning in right now is taking a big chunk out of your credit rating already. Bankruptcy will wipe out that debt and allow you to start rebuilding almost immediately.

Don't lose any more sleep over your financial crisis. Talk to a bankruptcy attorney near you about filing for bankruptcy protection.