Personal bankruptcy

Bankruptcy is a way of handling debts that you cannot pay and can get a new start with legal process. All bankruptcy cases are handled by federal court. You need to file a petition to commence bankruptcy including a statement of your assets and liabilities. Also you need to add your creditors list. Until your debts are sorted out by federal court, it stops your creditor to collect debts from you.

Personal bankruptcy can be filed under chapter 7 and chapter 13. Debtors filed bankruptcy under chapter 7 to encash their property and distribute it to creditors. And under chapter 13, debtors can make a 3 to 5 years plan to repay the amount to creditors.

Generally, your debts increases from:

* Medical bills
* Credit cards
* Mortgage payments
* Tax obligations

Before filing personal bankruptcy, you should always consult an attorney who is experienced in handling such cases. He will be able to guide you on how you can get protection from bankruptcy so that you need not loose all your property.