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Bankruptcy Q&A

Bankruptcy is a legal procedure based upon federal statutes that allows either individuals or businesses to change or discharge financial obligations that they cannot any longer meet. Bankruptcy is designed for people or businesses to get a fresh start or reorganize their debts to a manageable means of paying based on their income.

Much has been said lately about the poor financial state of the world. Many people are losing their jobs, homes, vehicles and ways of life. There is no easy answer to these problems. Along with the financial hardship comes stress, anxiety and mental anguish over what to do with bills a person or business cannot pay. Peace of mind is a luxury that is very difficult to find. For most people bankruptcy is not a way of life, but a means before losing everything he worked for during his life. Bankruptcy may be the last and only option a person or company has left.

Once bankruptcy is filed, creditors are required by law to cease contacting the debtor. Creditors can no longer continue with lawsuits, wage garnishment or contact the person by phone or mail. Debtors become free from threatening creditors.

Prior to filing bankruptcy under Chapter Seven (7) or Chapter Thirteen (13), a debtor must participate in credit counseling. This can be done over the telephone or internet. The debtor must then participate in another session of credit counseling prior to the discharge of bankruptcy.

No matter what Chapter the debtor files, a Trustee will be appointed over his case. The Trustee is the person that reviews the debtor's finance information and bankruptcy petition to ensure if the Debtor is not committing fraud, following the applicable laws appropriately and determine if there are any sources to pay creditors and how much.

If only one spouse elects to file, the other should not be affected. The bankruptcy should not show up on the other's credit report. If the spouse is a co-debtor on a loan, the spouse will remain responsible for payment. Many couples want to save the credit of one spouse, however, if both spouses are listed on majority of the loans, the benefits of bankruptcy may not be obtainable unless both file.

Filing bankruptcy can remain on the debtor's credit for a period of up to ten (10) years. Filing bankruptcy does not mean the end of the world but it will make borrowing money more difficult.

Our firm has set up an overview for either individuals or businesses considering bankruptcy. Our firm handles both Chapters 7 and 13. We do not handle Chapter Eleven (11) or Twelve (12).

*We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. Free background information avaliable upon request.