What is Bankruptcy?

Bankruptcy is a legal process that allows individuals or businesses to restructure or eliminate their debts when they are unable to pay them. It provides a fresh start and the opportunity to rebuild financial stability.

Benefits of Bankruptcy

• Bankruptcy can provide immediate relief from creditor harassment and lawsuits
• Cuts debt collection costs and saves money in legal fees
• Can help individuals regain control over their finances and make a fresh start
• May be eligible for government assistance programs, such as the bankruptcy court's Debt Management Plan (DMP)

Filing for Bankruptcy: A Step-by-Step Guide

Bankruptcy is a complex process, but with the right guidance, individuals can navigate it successfully. Here's a step-by-step guide to filing for bankruptcy:

1. Choose a type of bankruptcy (Chapter 7 or Chapter 13)
2. Prepare financial documents and gather required paperwork
3. Attend an initial meeting with a trustee or bankruptcy counselor
4. File the bankruptcy petition and complete any necessary forms
5. Serve notices to creditors and wait for approval

Debts and Bankruptcy: Understanding the Relationship

Banks will typically repossess or foreclose on a debt if it's not paid. However, bankruptcy can stop creditor collection efforts, allowing individuals to avoid repossession.