Legal help should be your last resort; however, if there is no possible way that you can repay your debts, you may want to consider this option. This option should only be considered after prayer and fasting. Bankruptcy reports will stay on your credit report for ten years.

There are two major types of bankruptcy: Chapter 7 and Chapter 13. If you declare Chapter 7 bankruptcy, your assets are liquidated and used to pay creditors according to procedures outlined in the Bankruptcy Code. This is the quickest, simplest, and most frequently selected type of bankruptcy. Under Chapter 7 bankruptcy, certain debts cannot be waived, including child support, student loans, and drunk driving fines.

If you declare Chapter 13 bankruptcy, a repayment plan is set up in which the court binds both you and your creditors to set terms of repayment. You retain your property and make regular payments with future income to a trustee, who pays creditors slowly over the life of the bankruptcy plan.

Research on bankruptcy has shown some interesting trends. The majority of all bankruptcies are caused by three events: divorce, death, or separation; unpaid medical expenses; and loss of the primary source of employment. Reduce or eliminate the possibility of these events through life and health insurance and continuing education and you substantially reduce your risk of bankruptcy.

Unfortunately, some have come to see bankruptcy as a way of getting out of paying the obligations they can honestly pay on their own. If you are thinking about bankruptcy, ask yourself the following questions:

• Is it honest, or is it just a way to get out of debt legally? (Remember, things that are legal may not necessarily be honest)
• Is your integrity worth more than money?
• Is it really necessary to declare bankruptcy?

A bankruptcy filing will remain on your credit reports for up to ten years after you make your last payment. This will hurt your chances of getting the credit necessary to purchase a home or a business. Filing bankruptcy should not be taken lightly; it should be your last resort. On the subject of bankruptcy, Elder L. Aldin Porter stated:

Utah is the number-two state in the nation “for per-capita bankruptcy filings.”. . . What an indictment of those of us who live in Utah! . . . Our bankruptcy law is on the books for the rare occasion when true disaster strikes a family, and none of us would take away that protection. But I'll also tell you it cannot function as it ought in a society with overextended and, frankly, somewhat dishonest people. The editorial goes on to suggest that the majority [in Utah] are not using Chapter 13, [which] permits the applicant to repay his debts over a longer period of time. . . Instead, [60%] applied for Chapter 7, which permits one to break his promises . . . and walk away from his debts, leaving his obligations forever unpaid. . . . There is a question asked of those who seek a temple recommend that deals with honesty. I sincerely hope that those who have taken unfair advantage of this just and proper law don't carry a temple recommend and feel that they're absolved from responsibilities (Elder L. Aldin Porter, Devotional - February 4, 2001 at Brigham Young University).