If financial hardship leaves you unable to repay your debts, filing bankruptcy is one way you can attempt to regain your financial strength. Though there are consequences to filing bankruptcy, both negative and positive, the basic concept behind it is to give people who are in considerable debt a chance to start over financially.

If you choose to file for bankruptcy, you'll be required by law to prepare a form with a list of all assets that are in your legal possession or control.

Bankruptcy is intended for the purpose of helping you deal with debts that you don't have the means to repay. It shouldn't be used for the sole reason of delaying your creditors from collecting payment from you for debts that you can or may be able to pay.

You can't be jailed in the United States for failing to pay a debt or for filing bankruptcy. In fact, the right to file bankruptcy is governed by the U.

The decision of whether or not you can keep any of your credit cards after you file bankruptcy is up to your credit card provider. Most credit card companies base their decision to retain your account on three main factors: what your balance is at the time you file bankruptcy, your payment history, and your willingness and ability to pay your current and future debt.

Most bankruptcy courts understand that debtors who file bankruptcy need their cars in order to rebuild their financial strength. As a result, both federal and state laws protect certain assets like your vehicle from being repossessed by creditors during a bankruptcy.

Although it's not legally required that you hire an attorney to represent you when you're filing a bankruptcy, it's generally in your best interest to do so as bankruptcy can be a very complex area of law.

You may be surprised to learn that filing for bankruptcy isn't a free process, no matter how deep in debt you are. You can expect to incur court and administrative costs as well as legal fees if you choose to hire an attorney.

You're required by law to disclose all of your assets to the court when filing for bankruptcy. If you knowingly and fraudulently conceal an asset from the court, it's considered a felony and you can be fined up to $5,000 (five thousand dollars), imprisoned for up to five years, or both.

Filing for bankruptcy, unfortunately, involves a large amount of paperwork and some of it can be quite complex. If you need help, the bankruptcy court in your municipality can offer assistance, as can an attorney.

Filing bankruptcy will automatically stop most lawsuits against you, whether they're pending or new. The reason being is that once you file your bankruptcy papers with the court, under any chapter of the Bankruptcy Code, it immediately triggers an injunction called an automatic stay that keeps your creditors from suing you to collect their debts.

The Bankruptcy Code was written with the understanding that in order to allow debtors to gain a fresh and healthy start financially, they'll most likely need to retain basic assets deemed necessary for day-to-day living.

Once you've decided that filing for bankruptcy is the best way to deal with your financial problems and you've given careful consideration to its consequences, you'll need to go through a series of steps to complete the process.

When you miss or fall behind on making payments on a home mortgage or other valuable property, the bank has the right to proceed with foreclosure. Foreclosure simply means that the bank sells the property and uses the proceeds to repay your loan.

The effect of bankruptcy on your spouse's credit depends on a variety of factors, mainly what the marital property laws are in your state and whether or not you choose to file individually or jointly with your spouse.

When you're granted a discharge of your debts in a bankruptcy, you're no longer personally liable for paying the debts. There are, however, certain debts, no matter what chapter you file, that aren't dischargeable or must be paid in full.

Personal bankruptcy, as opposed to business bankruptcy, allows individuals who are deep in debt and unable to pay their bills a chance to start over financially.

When you file for bankruptcy, your creditors are entitled by law to be treated equally and fairly. This means you can't favor one creditor over another by making what are known as 'preferential payments'.

A bankruptcy proceeding has two main purposes: to relieve individuals or businesses from their debts and to protect and preserve the rights of creditors and to provide them with equal and fair treatment in regards to their claims.

When you file for bankruptcy, you'll be asked to designate each of your debts as either secured or unsecured. This is important because it will determine what rights creditors will have in getting their money back.

It's not necessary for both spouses to file bankruptcy jointly. Each spouse can choose to file individually or one spouse may do it alone. Many times, however, it can be far more advantageous for both husband and wife to file together, especially if both of you own property together, are responsible for the same debts, or live in a state with community property laws.

Bankruptcy generally has little effect, if any, on a corporation's tax liability. While it's true that filing a Chapter 7 or 11 proceeding will immediately stop the Internal Revenue Service, and any other tax agency, from collecting any payment from a troubled corporation, the relief is only short-lived.

Trustees are individuals, usually attorneys or accountants, appointed by the court to oversee bankruptcy cases. The specific responsibilities that they must fulfill are dependent on the chapter of bankruptcy you select.

Both the chapter of bankruptcy you elect to file and your current financial condition will ultimately determine what happens to your house and car. Most likely, you'll be able to keep both as the Bankruptcy Code contains exemption laws that allow you to retain certain property, such as a home and car, to facilitate your financial ability to start over.

Have unforeseen circumstances such as divorce, job loss, or illness ever left you financially crippled? Perhaps you've used your credit cards too frequently and frivolously in the past and now face an overwhelming amount of debt that you can't recover from.

Filing for bankruptcy doesn't relieve you of your obligation to file your tax return for the year. In fact, you'll be responsible for filing both your federal and state income tax returns before, during, and after the bankruptcy, regardless of whether or not you have the ability to pay your tax bill.

Once you file bankruptcy, you generally won't be dealing with your creditors and bill collectors yourself during the proceeding. That job will be the responsibility of your attorney and the trustee handling your case.

Once you file your petition for bankruptcy with a bankruptcy court, the court will mail a notice to all the creditors you've listed in your petition. In the notice, each creditor will be informed of your filing, the date of the creditors' meeting that you'll be required to attend, and the time frame in which they must act in order to participate in the bankruptcy.

In response to a dramatic increase in the number of students seeking to avoid repaying their student loans through bankruptcy, a recent amendment to bankruptcy law has made all student loans, regardless of their age, non-dischargeable in any chapter of bankruptcy.

Whether or not bankruptcy may help you is dependent on the financial problems you're hoping to solve. Generally, if you're having problems fulfilling your student loan or tax obligation, there may be better ways to help you than bankruptcy.

Everyone who files for bankruptcy will have to attend a hearing in court. The hearing, called the 'first meeting of creditors', will be presided over by a bankruptcy trustee and usually takes place 30 to 40 days after filing.