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If you've been sued by a creditor because you can't pay your debts, filing bankruptcy will stop the lawsuit. You can also file bankruptcy after you've already lost the lawsuit and a judgment has been entered against you.
Filing Chapter 7 bankruptcy not only can wipe out credit card debt, it also can sweep all forms of unsecured debt into the garbage, if done properly. Among the bills that can go away are: Medical. Utility.
In fact, Jay Fleischman of Money Wise Law recommends defaulting on a loan before filing for bankruptcy. If you default, filing for bankruptcy can protect your assets from being seized by creditors. It can also protect you from having future wages or an inheritance garnished.
Debt settlement can be more lengthy than bankruptcy, and will still damage your credit score. If you need immediate relief or do not have the ability to pay monthly fees, bankruptcy may be the best (or only) solution.
If you declare bankruptcy, all your credit cards will be closed. You could have trouble getting approved by your previous card issuers in the future, depending on how strict the card issuer is. Bankruptcy stays on your credit file for seven to 10 years, but it impacts your credit score less and less as time goes on.