If Chapter 7 bankruptcy doesn't sound like exactly what you're looking for—perhaps because you don't want to sell off your assets—it's important to remember that you do have other options in Pennsylvania. You may be able to file for Chapter 13 bankruptcy instead, and it comes with some unique upsides, including the following:
1. It extends the amount of time you have to make payments and reduce your debt. The payment plan can last for years, giving you the ability to eliminate debt the way you originally wanted to on a schedule that fits with what you can afford.
2. You get to keep your assets. As noted above, Chapter 7 may be unattractive because you don't want to liquidate what you have. Maybe you really want to keep your business going, and you can't do it if your assets are sold. Chapter 13 lets you hang onto them and keeps your hopes alive.
3. You may not end up with as many black marks on your credit history. The bankruptcy filing is still going to show up, of course, and it doesn't leave for a decade, in most cases. However, if you follow the plan, you can avoid negatives like missed payments or repossessions. You can also help your credit by making the payments on time with the new plan.
4. You can use Chapter 13 for many different types of debt. Some things are excluded—like student loans—but you can lump together many other debts and create one repayment plan.
Before filing for bankruptcy, make sure you know all of the legal steps you have to take.
Source: FindLaw, "Pros and Cons of Declaring Bankruptcy under Chapter 13," accessed Jan. 17, 2016