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Generally bankruptcy results from the inability to pay creditors. Oftentimes it serves as the only remaining lifeline for an individual, family or business swimming in a sea of debt.

In the United States, there are several methods of filing for bankruptcy. Some methods include the liquidation of non-exempt properties, while others allow you to hold onto your property as part of a payment agreement that may take place over several years.

One of the main purposes of filing bankruptcy is to give a person hopelessly burdened with debt a fresh start by wiping out his debts. It should be a last option because your credit record will be significantly affected for a long while, yet sometimes it is the only feasible option to work toward a fresh start.

About.com: Financial Planning - Eight Warning Signs That You May Be Headed for Bankruptcy

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