Bankruptcy can be a solution that allows you to clear up your outstanding debts and start fresh without the harassment of debt collectors and threat of foreclosure or repossession. It can be a difficult process and persons who are considering bankruptcy should consult with a qualified bankruptcy attorney in their area to evaluate every aspect of their financial situation.

Most personal bankruptcy cases are filed under either Chapter 7 or Chapter 13 of the bankruptcy code. Federal law determines most aspects of the bankruptcy process, but some state laws play a part in the process also. Consulting an attorney can help you navigate through the confusing and complicated maze of bankruptcy law.

Filing Bankruptcy

When a person goes about filing bankruptcy, all of their property becomes part of the bankruptcy estate. A trustee takes control of the bankruptcy estate and uses the assets to satisfy your creditors. Federal or state law, depending on where you live, determines what items are exempt from the bankruptcy estate. Exempted items are items that you are allowed to keep after filing bankruptcy.

You should evaluate the amount and types of debt you have. There are secured debts and unsecured debts. Those debts are also divided into dischargeable debt and non-dischargeable debt.

Secured debts are those that have a lien against some property or asset. They range from home mortgages and car notes to loans that were made with an item of jewelry or bank deposit used as collateral. Unsecured debt is described as debt that has no guarantee, other than your word, that you will repay. It is most often credit card debt.

Dischargeable debt is the debt that you will not have to repay if you cannot afford to do so. Non-dischargeable debt is debt that will not go away after bankruptcy, such as student loans, alimony, child support or fines from criminal acts. You will be required to pay back all of the non-dischargeable debt even during your bankruptcy.

Bankruptcy Attorneys

A bankruptcy attorney can help you determine how best to maximize the assets you will be allowed to keep after bankruptcy. Debt relief is available for those who need it. Contact an attorney today to find out how bankruptcy can stop the harassment of debt collectors and help you become debt free.