What is Bankruptcy?

Bankruptcy is the last place a person in serious debt can turn. This is where you end up when you have exhausted all of your other options when trying to pay off the debts that you owe. When you file for bankruptcy your debts will be dissolved by splitting up your assets among those owed.
Which creditors get what is not up to you, it is up to a trustee and they make these important decisions by priority of the debts. Whether you are in individual filing for bankruptcy or if you are a business filing you may or may not get to keep your home or business, much of this depends on the state that you live in and the type of bankruptcy that you choose to file for. If you file for bankruptcy your debt could be resolved regardless of whether your debts have been paid in full or not.

Bankruptcy courts keep an eye on all bankruptcy proceedings in order to make sure that everything is followed to the letter. This is a delicate process and it needs to go as smoothly as possible. When you have filed for bankruptcy you will be dealing with the United States Bankruptcy Courts system.
You will also be dealing with United States Trustees. They are the ones that will decide where your various assets go and to whom. It is their job to administer to and supervise all of the bankruptcy proceedings.

The most common type of bankruptcy is Chapter 7. When you file for Chapter 7 you are going to have to liquidate most of your assets in order to pay off your creditors. Any amount that is not paid is written off as a loss on the part of your creditors.
The trustee will collect all of your assets and they will proceed to sell them and dispense the profits accordingly. All other Chapters of bankruptcy involve the restructuring of your loans. You will find better and more efficient ways to pay off your loans quickly, anywhere from 3 to 5 years.
You will be able to keep working and using your income to pay some of your debts when you file for these other chapters.

When you have filed for bankruptcy your creditors do not have that many options. They can dispute a Chapter 13 filing and in fact this does sometimes happen, when it does the person filing may have to change over to Chapter 7. When you are in the midst of bankruptcy proceedings you cannot transfer over any of your assets in order to avoid having to sell them off to pay creditors.
If you are going to be filing for bankruptcy you need to first make sure that you understand the finer points as you are going to have a lot on the line.
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Martin Lukac