Filing for bankruptcy can be very unsettling to clients, which is understandable; however, they do not realize that the bankruptcy laws are actually in their favor and exist to help them resolve their financial problems. There are 3 types of filings: Chapters 7, 13 or 11. Chapter 7 is for the individual debtor who wants to completely wipe out their debts; Chapter 13 allows the debtor to file a plan to pay back its creditors over a period of time/years in hopes of not losing established credit and a Chapter 11 is used primarily by businesses. The person or business entity filing for a bankruptcy is known as the "debtor". The debtor commences the bankruptcy by filing a petition in the Federal Bankruptcy Court. Immediately upon filing that petition the court imposes a "stay" against all of your creditors listed in your petition, meaning they must stop contacting you--and that is your first big step to relief in your situation. Next, the court will schedule you to appear within about 5 weeks before the Trustee, who is like a judge in your case. Only the creditors listed in your petition will be notified to appear also if they want to ask you questions or have some objection to your filing. As long as there is no fraud or misrepresentation on your part, then your creditors usually do not appear at the initial meeting with your Trustee. The Trustee will review your petition and if everything is in order, the Trustee can grant you a discharge of all of the debts listed in your Petition and you will from there on not be responsible to those creditors. remember, you will only be discharged from the debts listed in your Petition so make sure you list only those creditors you want a discharge from. You do not have to list all of your debts, some debts you can agree by separate agreement to pay off or renegotiate so you can retain credit with that particular creditor. For instance, there may be one credit card you would like to keep and know you can pay off, so you would not list that creditor.

The first thing anyone should do if he or she feels bankruptcy is the answer for relief from out of control bills is to gather up their most recent bills, statements, mortgage statement, bank account and other financial statements in the last month, make a list of all of their assets and bring all of those documents to be analyzed by an attorney. There may be ways to save your credit and property through a proper analysis of your situation.