Think of a ladder leading down from a jetty. The bottom rung is actually under the water.

So you think you may be heading for insolvency. The best approach, if possible, is to deal with your debts first before spending further. If you take action early on, then you will be able to start higher up the ladder of options 1 to 4. If the debt becomes too much, you might find that you start half way down the ladder or are only left with option number 4, which is bankruptcy.