Bankruptcy is one of many options available to people who are struggling financially. Whether it’s due to medical debt, credit card bills, job loss, decreased income or some combination of factors, bankruptcy can be a financial fresh start for those who really need it. But it’s also a complex legal process that should not be considered lightly. Bankruptcy has long-term effects on credit and other drawbacks. So how do you know when it’s time to file bankruptcy? These are the factors to consider.

 Amount and Types of Debt

The two most common types of consumer bankruptcy — Chapter 7 and Chapter 13 — are designed to address specific types of debt. They primarily discharge or restructure unsecured debts, such as credit card debt and medical debt. However, they do not help you address other types of debt, including student loans, back taxes, child or spousal support payments or other types of court-ordered payments.

If you’re struggling with unsecured debt, bankruptcy is one option to consider. But if other types of debt are weighing you down, you’ll want to see about other options.

Short- and Long-term Financial Goals

Regardless of which type of bankruptcy you file, it will stay on your credit report a minimum of seven years and as long as 10 in some cases.Think about your short- and long-term financial goals and how diminished credit may keep you from reaching them.

If you’re in a long-term job with stable housing and a reliable vehicle, you may not need to access new credit right away. But if you’re in the process of job hunting, house hunting or buying a new car, you’ll want to put off declaring bankruptcy until those things are sorted out. It may seem counterintuitive, but the more stable you are, the better time it is to file bankruptcy. Filing while also undergoing other major life changes can complicate all those processes.

You also need to keep in mind that filing bankruptcy isn’t free. It comes with its own set of expenses, including legal fees. Although you aren’t required to have an attorney’s assistance to file bankruptcy, it can save you from making costly mistakes during the filing process. At the very least, you’ll want to have an initial consultation with a bankruptcy attorney to review your options, even if you ultimately end up filing on your own or choosing another debt relief solution.

Your Mental and Physical Health

Dealing with the stress of unmanageable debt can take a major toll on your mental and physical health. If your debt is at the point where it’s causing you to lose sleep, experience anxiety, panic attacks or physical ailments, declaring bankruptcy may offer you the relief you need.

Other Possible Solutions

In many ways, bankruptcy should be the last debt relief option you consider, rather than the first. Before even meeting with a bankruptcy attorney, you should look into the possibility of creditor hardship plans, debt consolidation, or a nonprofit debt management plan. The options you have available will vary depending on your unique situation, but it’s worth the time to research all possible solutions before committing to bankruptcy. After you’ve reviewed all possible options, you can more accurately decided if it’s time to file bankruptcy.