The stress of unpayable debt can reduce your ability to focus on other issues in your life. It can impair your thinking and ability to concentrate, making you less effective at work, so you miss out on a much-desired promotion opportunity. It can leave you without enough mental energy to sit and help your kids with homework or decipher their convoluted stories about who did what to whom in the playground.
Dealing with overwhelming debt could also put you on edge generally (especially if your debt worries keep you awake at night), making you snappy with those around you and harming your relationships.
Bankruptcy can relieve much of that stress right now
Knowing that some or all of your debts will disappear can bring massive relief, mitigating a significant amount of your stress and allowing you to focus your time and energy on what matters.
It can put an end to creditors contacting you
Once you file, your creditors must immediately cease all contact, as must those who are working on their behalf, such as debt collectors. They might be allowed to resume contact later in some cases, but typically, the automatic stay that applies to all active bankruptcy cases ensures that collections-related communications stop. Note that the automatic stay only applies to creditors whose debts the filing covers, so your student loan lenders will still keep in touch.
It can stop the bank from taking your house
If the bank is trying to foreclose on your home, filing for bankruptcy can halt them in their tracks. It’s only a temporary pause, though. That’s one of the reasons you should not file for bankruptcy without support. Getting help understanding what else you need to do, such as catching up on outstanding mortgage payments or renegotiating to avoid foreclosure, can help you get the best possible bankruptcy outcome.