Bankruptcy is a situation when your assets are not enough to pay off your liabilities, but this could be in many situations. Bankruptcy should only be applicable to you when your creditors have lined up in front of your door and you are taking up more loans to pay off your previous ones and it have become a never-ending cycle of loans.
Also, you need to think of whether you will be able to make enough for your living so that you can support yourself with a house and other basic-need items after court have ordered to sell off all your assets to pay off the creditors’ amount. While researching on how to file for bankruptcy, you must be aware of that in India, the bankruptcy laws are strict, and they do not consider anything about your accommodation and other expenses while dealing with your bankruptcy case.
Only benefit you will find while researching on how to file for bankruptcy is that you don’t have to face the threatening calls from your creditor.
While researching on how to file for bankruptcy, first see if you could get less expensive loans like from your friends and family to pay off your creditors, or could you work it off with your creditor to make the loans less painful and extend your time limit in which you could pay off those loans.
You should also check if you are following any sort of budget to get off this situation. The bad credits situation is often seen in cases where the individual has not been following a budget and is spending relentlessly on living his luxurious life.
See if your pay hike in recent times would help you pay off your debts better and whether you will be able to pay them off in recent future.
Also, bankruptcy is not the end of the road. You still have your skills and knowledge backing you up and could be a good thing to make a fresh start.