Debt is a viscous problem that seems to always get worse before it gets any better, especially if you are trying to repay it on a very limited income. Knowing when it may be time to file Chapter 7 bankruptcy is a difficult decision, especially if you have no previous knowledge of the laws regarding personal debt resolution. Consulting a bankruptcy lawyer is probably the best first step to take.
The laws are constantly changing when it comes to bankruptcy, and only an experienced professional is qualified to advise you on your best options. Many people assume they know something about bankruptcy because they know someone who went through it or gleaned some information from a commercial. In reality, every filing is different from the next, and everything depends on the finances of the debtor, not the requests of creditors. You need to be open and honest with your attorney about your finances, otherwise the courts could severely fine you for perjury.
Another caveat is how complicated the filing process can be and is just another reason to rely on expertise. You have to thoroughly characterize your financial state with arcane calculations, many of which will escape the average debtor. Entering the court without sound reasons as to why you need to file bankruptcy may result in a judge siding with the terms your creditor has set; the very same ones that have driven you to the decision to file in the first place. Be prudent and exercise pragmatism when it comes to resolving your debt, otherwise it could get worse.