Filing bankruptcy is a legal proceeding in which a person who cannot pay his or her bills can get a fresh financial start. All bankruptcy cases are handled in federal court. Financial problems can be deeply disturbing and extremely stressful. Filing bankruptcy may be your best option if you are not able to pay all your debt. A bankruptcy lawyer can advise you whether filing bankruptcy is the right decision for you. Filing bankruptcy can make it possible for you to eliminate the legal obligation to pay most of your debts. It is designed to give you a fresh start. Filing bankruptcy can stop wage garnishment, debt collection harassment, and similar creditor actions to collect a debt. You should inform your bankruptcy lawyer about all debt, so your bankruptcy lawyer can give you good advice. There are specific chapters of the federal bankruptcy law. Proceedings under Chapter Seven (known as straight bankruptcy) involve taking most of the borrower's property. The court appoints a trustee to sell off the assets and distribute the cash among the creditors. Proceedings under Chapter Thirteen (known as wage earner's bankruptcy) involve the borrower proposing a plan for repaying a portion of the debt in installments from the borrower's income. Chapter Eleven of the federal Bankruptcy Act is generally used by corporations and not by consumer debtors. Its proceedings are expensive and complex. Consumer debtors normally use Chapter Seven or Chapter Thirteen.



Once the bankruptcy proceeding ends, the borrower is no longer liable. This occurs when the bankruptcy court enters a discharge order in a Chapter Seven case or the borrower has paid the debts due to the credit grantors according to a plan in a Chapter Eleven or a Chapter Thirteen case. In legal terms, the court has discharged the borrower from the debts. The borrower then starts over again with a clean financial slate, but the record of the bankruptcy will remain on the borrower's credit record for up to ten years. Bankruptcy may be the best, or only, solution for extreme financial hardship. However, it should be utilized exclusively as a last resort, since it always has long lasting consequences. Be sure to consult a bankruptcy lawyer before resorting to filing bankruptcy as a means of solving your economic troubles. We provide access to free filing bankruptcy information