About Bankruptcy  Chapter 7, Chapter 11, Chapter 13

Bankruptcy law is a federal law designed to assist individual consumers and businesses facing financial difficulties. With respect to consumer debtors, the goal of bankruptcy is to help individuals get beyond their financial turmoil and obtain a fresh start.

The bankruptcy process involves preparing a petition that is to be filed in federal court. The petition contains information concerning an individual's assets, debts, creditors, monthly income, monthly expenses and financial information. The debtor must include all of its creditors in the petition. Upon the filing of a petition, the court grants the debtor with an automatic stay. The automatic stay is a provision in the bankruptcy law that prohibits creditors from harassing debtors. Specifically, creditors are prohibited from attempting to collect money or obtain property, starting or continuing lawsuits or foreclosures, freezing bank accounts and garnishing a debtor's wages. In addition, creditors can no longer make threatening phone calls or send collection letters to a debtor.

For a debtor that is married, it is not required that their spouse file bankruptcy also. Rather, any decision concerning a potential joint bankruptcy filing should be evaluated on the circumstances of a particular case at issue.

An individual's bankruptcy filing can be reflected on their credit report for up to ten years. That does not mean, that an individual will not obtain credit again. Many lenders in the credit card and mortgage industry do not automatically disqualify an applicant because they previously filed bankruptcy. In addition, it is important to note, that if someone is behind on their bills their credit rating may already be poor.  Filling bankruptcy is often the last option but none the less it serves as an opportunity to remove the burden of debt of one's shoulders and start over fresh.