Many people think that they can’t file bankruptcy because they will lose their house, or car, or that some other terrible thing will happen if they file. The reality is, if you are reading this information and struggling with your bills, filing bankruptcy may be one of the best financial decisions you will ever make.
Some people believe the bankruptcy system is designed to punish people for being in debt or leave you with nothing in return for eliminating your bills. This is simply not the case.
The bankruptcy system is a Federal Law creating a level playing field for people and all of their creditors. Bankruptcy allows an honest debtor to give the Court information about their financial situation. In return for giving the Court this information, you get immediate protection from your creditors and long term relief from your debts. In many cases, a Chapter 7 bankruptcy can eliminate all of your unsecured debts without you paying anything or losing a single item. In other cases, a Chapter 13 gives you a chance to stop a foreclosure on your home and pay your credit cards as little as 5 cents on the dollar.
Congress created the bankruptcy system because it recognized the need for a clear set of rules to allow people and businesses to get relief from their debts. These rules ensure everyone involved in the process is treated fairly and that the situation is resolved as quickly as possible. The Bankruptcy Court even reviews the legal fees that attorneys charge to make sure that they are fair.