Is bankruptcy the right choice for you?

In this tough economy cutting corners and pinching pennies may not be enough to scrape through. It may have you facing the difficult decision of bankruptcy.

You've done the math, but is it really the right option for you? The numbers alone configure confusion: Chapter 7, 11 or 13? Add in the many misconceptions about bankruptcy: Is it really protection, a new start, or does it dog you forever?

And you can see why help is needed to understand it. For someone with over $36,000 in credit card debt with a house in mitigation, bankruptcy attorney Joanne Coshonis has the following advice.

"One option would probably be a wage-earner Chapter 13 case, which is reorganization for the consumer," Joanne said. "The Chapter 13 is based on whatever income there is in the family and you go through a process where you calculate your current monthly income and that would include your income and all of your expenses and what remains can be distributed to your unsecured creditors."

If you're currently unemployed with no source of income and facing money troubles, Joanne suggests filing for Chapter 7 bankruptcy. "If a person is not willing to surrender their home and would like to maintain current mortgage payments, they have to have some source of income or some financial help to make that current mortgage payment."

Many people express fear about what comes after bankruptcy. Some experts say it's survivable and others say it's the absolute worst thing you can do and should be avoided at all costs.

According to Joanne, it's definitely survivable and a person can come out with a fresh start. "What they really need to do is determine what their needs are and distinguish them from what they want. Then, pare down what they live on and seek some relief from the debt they've accumulated over the past whatever years."