In regards to your dad, it depends on how good your relationship is and how well you would deal with him doing that. Leaning on experience is a useful thing. It could also make you resent him. That is a tough balancing act.

As for the bankruptcy, I had to do it in 2004(chapter 7) and hated doing it at the time. For some reason that I can't remember, the VA withheld a ton of my disability pay for years and was too messed up to work so I fell behind and with fines and all that it became too much to overcome. The process wasn't nearly as horrible as I thought. I used a bankruptcy lawyer, but he only charged $150+filing fee and the hearing was quick and painless. Unless outright fraud is suspected or a home loan is involved, creditors don't typically show up to contest it. At least that is what my lawyer said in 2004.

One of the best parts of filing is that all your creditors are notified and they have to cease collection activity. That was a huge stress off me.

It cleared out debts that I would never be able to repay and really did give me a fresh start. From that point on I was really careful with credit, never letting it get to the point where it could overwhelm me again.

It is true that it sticks on your record for 10 years but that didn't negatively impact me a whole lot. Less than a year after, I got a new auto loan @ 8%, not great but I was surprised with such a new bankruptcy and kept up with the payments and paid it off on time. I was also able to get some credit cards and carefully build up credit and have been careful with those ever since.

Right before the bankruptcy went off my record I had a 650 FICO score and it is now around 750. I would still have a sub-400 if I had not filed and wouldn't be currently pursuing a VA home loan.

Debt consolidation can wreck your credit more than a bankruptcy, with the added bonus of still being in debt. You really have to do your homework with these types of programs.

I can't say which would be the way to go, I can only give you personal experience. Find a bankruptcy lawyer that offers free consultation as a good starting point.

Just remember, neither way is the end of the world.