The personal savings rate stands at less than one-half of a percent of household income. Debt levels, fueled by credit card mania and wealth effect optimism, continue to soar.

And last year alone, more than a million cash-strapped consumers made their way to bankruptcy court seeking federal protection from creditors and a chance to begin anew.

Unfortunately, experts say, many could just as easily have solved their problems using alternate means -- and saved themselves lots of headaches down the road.

"The bankruptcy laws were really intended to help out those who were struck by catastrophes, but they've been really used a lot by overextenders to sort of bail themselves out," said Joel Tricknor, a certified financial planner and chairman of a federal credit union in Reston, Va. "There are penalties for this, though, that people don't understand. It really does wreck your credit for a long time and it's going to affect your ability to buy a car and get a mortgage in the future."

Many employers, Tricknor adds, also unearth bankruptcy filings in background checks on prospective job candidates.

"A bad credit rating won't help you out there either," he said.

Joy Thormodsgard, chief operating officer of the National Foundation for Consumer Credit in Silver Spring, Md., agrees, noting anyone facing a financial crisis should first consider their options before making a move.

"We don't like to see people file for bankruptcy unnecessarily," she said. "We don't think it's an evil thing, but it is a last resort and it has the disadvantage of making it more difficult to borrow money at an affordable rate in the future. It also stays on your record a long time. It's not something you want to do unless it's absolutely necessary."

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