Bankruptcy is an option when a debt-laden business is failing, but it’s not always the right one. Even when it is the best choice, there are multiple types of bankruptcy filings, each with their own advantages and disadvantages.

We asked bankruptcy attorneys David Tawil and Steve Azarbad, who specializes in bankruptcy and business law and are now owners of ETG Capital, a NYC-based company offering innovative solutions for protecting high-risk and distressed accounts receivable, to help sort through the dos and don’ts of filing for bankruptcy. Mr. Tawil practiced bankruptcy law at Davis Polk, and Skadden Arps. Mr. Azarbad is a former associate at Weil Gotshal and Skadden Arps. To determine if it’s worth speaking with a bankruptcy lawyer and taking the measure further, consider the following points offered by ETG Capital experts.

Many people fall behind on their payments at some point in their lives. Don't worry — you won't go to jail. Having debts is not a crime.

You may be thinking that the answer to your problems is to file for bankruptcy, and although bankruptcy is a good solution for some, it is not for everyone. Chapter 7 bankruptcy is a legal process that eliminates certain debts and gives you an opportunity to start over, but does not eliminate all debts. You will have to continue paying child support, spousal support, unpaid taxes, your mortgage, and federally insured student loans. Chapter 13 bankruptcy can help you establish a payment plan to pay off your debts. If you are considering filing for bankruptcy, you should speak to an attorney to find out what your options are.

The debts that bankruptcy can help you with are known as private unsecured debt. If you have such debts, you may be able to eliminate them by filing for Chapter 7 bankruptcy:

The rules are different for other types of debts, such as

Do I have to declare bankruptcy?

If you are considering filing for bankruptcy, you should first find out if your income or personal property is protected. Protected means that you have no money or property that a collector can legally take from you. Bankruptcy may not be required if

If after reading this post, you still have unanswered questions, you should consult an bankruptcy attorney who is familiar with bankruptcy laws or a legal assistant who works for such lawyer.

It is also important to seek advice on consumer credit from an entity approved by the U.S. Trustee before filing for bankruptcy. Federal bankruptcy law requires bankruptcy filers to receive consumer credit advice from an approved entity within 180 days of filing for bankruptcy. The consumer credit consultant will review the bankruptcy alternatives and their consequences with you.

ETG Capital’s partners bring over 20 years of bankruptcy law, corporate restructuring, and credit underwriting expertise to every deal. With minimal organizational constraints, ETG has the flexibility to underwrite some of a client’s most difficult accounts. ETG’s sole priority is to provide the most creative and ambitious solutions to client credit challenges.