Bankruptcy is a legal process by which an individual or other entity obtains relief from creditors' actions (such as foreclosure and repossession) and debt (including judgments).  Relief can be a complete discharge of all of the individual's (or married couple's) liability to pay debt or a reduction of the debtor's (or debtors') debt load to some extent.  

To file bankruptcy, a debtor is required to take a debt counseling course prior to filing a petition with the bankruptcy court.  The debtor also must prepare and file a petition, a complete and thorough listing of all of the debtor's assets, debts, income and expenses.  Obtaining the assistance of a bankruptcy attorney to prepare the petition is critical.

While bankruptcy law requires all debts of the debtor to be administered in the bankruptcy case, debts secured by houses, cars, and the like, are treated specially to some extent allowing most debtors to keep property provided the debtor pays the monthly expenses thereof and cures any arrearage.  Insurance and upkeep on such property must also be maintained.

In some cases, debts co-signed by others can be treated specially in order to protect the co-signor.  

While student loans and taxes are not ordinarily dischargeable, bankruptcy can provide some relief from these debts under certain circumstances.  

After filing the petition, the debtor must attend and testify at a "meeting of creditors" to verify their identity and the accuracy of the petition.  The debtor will also answer any questions asked by any interested party attending the meeting, including the trustee assigned to administer the case.  Despite its name, the "meeting of creditors" is ordinarily brief with few if any creditors attending.

Depending on the individual circumstances, the debtor may be required to provide additional information or attend other hearings in the case before a discharge is granted, although these requirements are not common.

Before the case is completed, the debtor must complete a second counseling course on financial management.

Bankruptcy relief is often described by the chapter number of the statute under which the petition is filed, like Chapter 7 or Chapter 13.  While a debtor may have a preference to file under one case or another to obtain one type of relief or another, each case must be carefully evaluated by a bankruptcy attorney to determine which chapter is the most appropriate under the individual circumstances.

DORSETT LAW FIRM has practiced bankruptcy since 1997 in the Middle District of Pennsylvania and other jurisdictions.  Contact us at 717-267-2921 or email us here for a free telephone consultation.

We Are a Debt Relief Agency.

We help people file for Bankruptcy Relief under the United States Bankruptcy Code.

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