Worst case is that a debtor gets sued, loses, and the judgment creditor starts to execute on the judgment--with all the costs of doing that added to the judgment.
Non-exempt bank accounts can be tapped very quickly, and the debtor gets to protest only AFTER that has happened. Whether the account would be exempt is a question of local law, but most of them are NOT.Wages
can get garnished, usually at 25%.
Absent wages, a determined creditor can track down customers and clients and get an order of execution requiring them to pay what they owe to the debtor to the creditor instead. In other words, any account receivables don't go in to the debtor, they get diverted to the creditor.
Whether to declare BK is a personal decision. The legal advice needed to make that type of decision is beyond what we can properly give on JustAnswer.com.
Sorry to hear about that situation. Like many stories these days, the best answer would be more money coming in.