Times are tough, many people are in debt up to their eyeballs and with the slow economy, many are considering filing bankruptcy or have already done so. Over 22,000 individuals and businesses have filed for bankruptcy in the state of Massachusetts in the last year.

Unfortunately with the current economic climate, this trend is likely to continue. Consumers that are in a financial bind should try the debt consolidation route first, but if that is not an option, bankruptcy may be their only other choice. Read on to find out if filing bankruptcy is right for you.

What is bankruptcy and what does it do?

Bankruptcy helps people who can no longer pay their creditors get a fresh start by liquidating their assets to pay their debts, or by creating a repayment plan. Filing for bankruptcy also protects troubled businesses and provides for orderly distributions to business creditors through liquidation or reorganization.