Hi - my name is XXXXX XXXXX I'm a Bankruptcy litigation attorney here to assist you.
Bankruptcy should certainly be a last resort. However, if you don't see any way that you would get out of this debt by paying it off, bankruptcy is certainly a good consideration. You're correct that bankruptcy will harm your credit for 7 years, and will make it much more difficult to borrow money, get lines of credit, etc. for at least that long. However, if you get to the point where creditors are closing your lines of credit/accounts, suing you for balances due, etc., your credit is going to be shot anyway.
If you want to fie bankruptcy, there are 2 real options - the first is a chapter 7
, which is a complete liquidation of your assets to pay your debts. It is possible to keep your house if you are current on your loan. You can enter into a reaffirmation
agreement with the lender that allows you to keep the debt and the property. You can usually do this with at least 1 vehicle as well. All other debts will be discharged if unsecured (no collateral); if there is collateral securing a debt, the collateral will be turned over to the creditor (unless you do a reaffirmation agreement), liquidated and applied to the debt owed. The remaining debt would be discharged through bankruptcy.
The second option is a chapter 13 bankruptcy, which is a debt reorganization. In this case, you can keep all of your assets, but you also have to pay all of your creditors. The way this is do-able is by extending loan terms, reducing interest rates and reducing monthly payments. If you have the cash flow to be able to afford a plan, that is a good option since you can keep your assets. Also, a chapter 13 doesn't look as bad on your credit as a chapter 7.