Is Bankruptcy the Answer to your Financial Problems?
 What is Bankruptcy?
Bankruptcy is a legal proceeding filed in United States Bankruptcy Court. Although bankruptcy generally is dealt with by the federal courts, State law also plays a large role in many cases. Consequently, it is difficult to generalize bankruptcy law across state lines, so you are better off consulting someone familiar with bankruptcy law in your particular state before taking steps to file bankruptcy yourself.
Filing for bankruptcy can be a very difficult, time consuming, and long process. You can lose your case if it is filed improperly. In fact, very few people have been able to file successfully on their own under chapter 13 (reorganization). It might be wise to consult an attorney and/or a credit counseling service before attempting to file for bankruptcy.
The decision to file bankruptcy affects many parts of your life, and you should think hard about whether bankruptcy offers you the best course of action. If you decide that bankruptcy is the best way to handle your financial problems, be sure to thoroughly explore your filing options.
Types of Bankruptcy
There are many different ways to file bankruptcy. Each way, or "chapter," is tailored to a specific type of filer. Most individuals and small business owners file under either chapter 7 or chapter 13. However, there may be a better option for you. See the next page for descriptions of the types of bankruptcy.
Chapter 7 - ("Straight Bankruptcy" or "liquidation")
Basic liquidation for individuals and businesses. In this case, the assets of the individual or business filing for bankruptcy are sold (liquidated) to pay off the creditors. These assets may include the filer's home and/or car (but see page 4 for information about the possibility of "exempting," or keeping, your home or car).
Chapter 9 - (Municipal Bankruptcies)
This chapter of bankruptcy is reserved exclusively for cities and towns who cannot pay off their debts.
Chapter 11 - (Substantial Debt Reorganization)
Chapter 11 bankruptcy is reserved for filers with unsecured debts of at least $336,900 or secured debts of at least $1,010,650. Although usually filed by businesses, individuals may also file under chapter 11.
Chapter 12 - (Bankruptcy for Family Farmers and Fishermen)
Chapter 12 bankruptcy may only be filed by family farmers and fishermen. The law offers people or businesses filing under chapter 12 certain benefits not available to those filing under other chapters.
Chapter 13 - (Reorganization)
People filing bankruptcy under chapter 13 are given a plan to repay some of their debt by the court. Although not all their debt is discharged, people filing under chapter 13 are often able to keep more of their assets, such as their home or cars.
Chapter 15 - ("Ancillary and Other Cross Border Cases")
People who also have debts in countries outside of the United States may seek relief under chapter 15. | 
