When your financial situation is a mess, you will likely pass through several stages on your path to a final decision. At first, you may believe that you can get caught up on your bills and avoid a filing. When bill collectors are harassing you constantly, however, and you are being threatened with foreclosure, repossessions, utility shut offs, lawsuits and more, you may have to take action quickly. The decision to declare bankruptcy is not an easy one; you may harm your credit for years and the thought that you allowed your finances to get in such a state can be demoralizing and embarrassing.