If you decide to file bankruptcy, the attorney will inform you that within six months of doing so you must go to a court-approved credit counsel- ing agency. The agency will make sure that you understand your alterna- tives to bankruptcy and that there is no way that you can avoid having to file.

If the agency concludes that bankruptcy is your only option, it will give you a certificate that you must provide to the bankruptcy attor- ney. The certificate permits you to file for bankruptcy. Without it you cannot pursue bankruptcy. For detailed explanations of your bankruptcy options and the bankruptcy process, check out Personal Bankruptcy Laws For Dummies, by James P. Caher and John M. Caher (Wiley).

Paying the Important Stuff If You Can't Pay Everything

If you've cut your budget to the bare bones and you still can't afford to pay all your debts and cover all your living expenses, you have to decide what you will and won't pay. Here's how to prioritize:

Essential living expenses: Your essential living expenses belong at the top of your "Bills to Pay" list, including putting bread on your table, keeping a roof over your head, keeping your utilities on, and gassing up your car if you need it to earn a living. However, make sure that you have reduced those expenses as much as you possibly can.

Secured debts: Your secured debts also belong at the top of the list of things to pay. Keep reading if you aren't sure what a secured debt is. Certain unsecured debts: Some of your unsecured debts should take priority over others. We go into detail in the upcoming section "Knowing when to prioritize an unsecured debt."

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