For individuals who have become overwhelmed by large amounts of debt filing for bankruptcy is a potential solution. filing for bankruptcy can allow someone with high debt to resolve the financial problems they face and possibly even start over with a clean slate. Before getting started. It should be noted that although bankruptcy may help you get rid of some or all of your debt, it will also stay on your credit report for up to 10 years. This means that you may not get a loan when you want one bankruptcy is a serious step and how much it can help you depends on your situation. If you’re thinking about bankruptcy, you should talk to a lawyer as early as possible bankruptcy may make it possible for you to get rid of the legal duty to pay some kinds of debt including medical debt, utility bills, credit card debt, and other qualifying debt. declaring bankruptcy can also temporarily stop certain actions by creditors, including foreclosure on your home, and if under Chapter 13, giving you a chance to catch up on Miss payments repossession of a car or other property or force the creditor to return property even after it has been repossessed wage garnishment debt collection harassment and similar creditor actions or getting your utility service back or keeping it from being cut off. However, bankruptcy cannot fix every financial problem declaring bankruptcy will not stop you from going into debt in the future if your income is less than your expenses. Bankruptcy will also not get rid of debts that are singled out by the bankruptcy law for special treatment such as child support, alimony, and most student loans, the automatic stay as soon as the bankruptcy is filed, the automatic stay goes into effect. The automatic stay is an order of the bankruptcy court in place in most cases prohibiting most creditors from taking collections actions against the debtor or the debtors’ property while the bankruptcy is pending. This gives the debtor some breathing space when the case is filed. Types of bankruptcy the two most common types of bankruptcies for individuals who have fallen on hard Financial Times are chapter seven and 13 bankruptcies. Chapter Seven bankruptcy is also known as a straight bankruptcy or liquidation case because the debtor agrees to sell or give up all of their non-exempt property. The bankruptcy court trustee will supervise the sale of the property and will give the money from the sale to the creditors if a property is not exempt, but still of limited value. Considering the costs of holding the sale. The trustee may decide not to take the property, but that will be a decision of the trustee and not of the debtor. Once the sale is complete, the court enters to discharge all of the debtor’s dischargeable debts that are not covered by the money from the sale of assets. Many chapter seven cases are no-asset cases in which the debtor has no non-exempt assets and the debts are discharged without partial payment. Chapter 13 on the other hand, is often called reorganization because it allows the debtor a chance to get organized to pay off certain debts over time. In turn, this allows the debtor to keep valuable property like a house or a car. When the debtor files for chapter 13 bankruptcy, he makes a bankruptcy plan for how he will pay his debts. Generally, the plan will call for a payment to the trustee each month in turn, the trustee will use these payments to pay the creditors, the debtor’s attorney and the trustee’s fees, and the creditors in order of priority. This plan usually lasts from three to five years. The plan must be approved by the court after completion of payments under the plan chapter 13. debtors receive a discharge of most debts. The decision of whether to file bankruptcy and under what chapter is extremely important. This decision should be made only with competent legal advice from an experienced bankruptcy attorney after a full review of all the relevant facts of the debtor’s case. We hope you found this educational video on the basics of bankruptcy helpful. This video provided you with legal information and not legal advice. If you need legal advice or thinking about filing for bankruptcy, please contact an attorney.