What should be considered only as a last resort when facing financial difficulties?

Bankruptcy should be considered only as a last resort when facing financial difficulties because it has significant long-term implications for an individual's financial future. Filing for bankruptcy can provide a legal way to eliminate or restructure debt, but it also comes with consequences such as a severe impact on credit scores, making it more difficult to secure loans or credit in the future. Additionally, bankruptcy can remain on an individual's credit report for up to ten years, affecting their ability to make large purchases, such as a home or car.

On the other hand, options like debt repayment, credit counseling, and loan modification typically serve as initial steps to manage debt more effectively without the lasting damage associated with bankruptcy. These alternatives focus on negotiating terms with creditors or seeking financial advice, thus retaining the individual's financial standing while addressing their challenges.