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Bankruptcy is a process under Federal Law which provides debtors a "Fresh Start"
When this country was being formed, there was a fundamental choice, debtors prisons or a debt forgiveness process. The Founding Fathers chose Bankruptcy.
The decision to file for Bankruptcy Protection is often the hardest part of the entire process. Our culture, tradition and upbringing have made paying our way and paying our obligations a fundamental value. Unfortunately when the bills come due and there is not enough to go around, when robbing Peter to pay Paul no longer works, you may have questions about what Bankruptcy can do for you.
There are several forms of Bankruptcy.
The one most often thought of is Chapter 7. This requires a listing of debts and assets. If there are assets, they can be taken and used to pay creditors. There are provisions for retaining some of your belongings. At the conclusion, the debts are discharged and the fresh start can begin.
Chapter 13 is an individual repayment plan. This type of protection can allow you to bring accounts currents over a period of time and prevent foreclosures and repossessions. Plans usually last for 36 months
UPDATE
Congress is in the process of making major changes to the Bankruptcy Laws. The major effect will have more people use Chapter 13, the repayment plan, than Chapter 7. The law could pass at any time. There will be 6 months before it is official
The Court and the US Trustee are already starting to look closer at Chapter 7 filings.
If you have questions, don't put off getting answers!!!!
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