While bankruptcy is certainly not the end of the world, it should not be entered into lightly, either. A bankruptcy on your credit report will severely limit your ability to buy a home, a car or qualify for business loans. If you find yourself in dire financial straits, consider all of your options before filing for bankruptcy.
The first place to start is with a credit counselor. A warning, though — there are lots of unscrupulous businesses out there selling themselves as debt consolidation services promising to lower your payments. Unfortunately, some of those are scams. To find a reputable credit counselor in your area, visit the Department of Justice's Credit Counseling and Debtor Information page.
With help from your credit card counselor, you may be able to cut back on unnecessary expenses and increase your income enough to slowly pay down your debt over time. If necessary, the credit counselor can help you negotiate with your creditors to lower your interest rate or minimum payments. Creditors tend to be more flexible when the alternative is default. If you own a house, can you refinance for a lower interest rate? If not, it's better to sell the home than to risk foreclosure or bankruptcy.
Even if you feel like you're out of options, meet with a bankruptcy lawyer before filing with the court. The lawyer will consider your specific financial needs and determine if bankruptcy is indeed the best option.