What is Bankruptcy?
Bankruptcy allows one unable to pay their bills to get a fresh start financially. The United States Bankruptcy Code provides for the right to file for bankruptcy, and all bankruptcy cases are litigated in Federal Court. The filing of a petition for bankruptcy initiates a formal legal proceeding which immediately stops creditors from attempting to collect any debts while the Court considers your financial situation and decides if bankruptcy relief is appropriate.
Bankruptcy is a legal process that allows a debtor who owes more money than he or she can repay, to either repay a portion of the money over time, or have the entire debt forgiven. Once bankruptcy is filed, creditors must stop all collection efforts against the Debtor during the bankruptcy, unless they get permission from the bankruptcy court to continue.
The laws allows people or businesses who owe more money than theyre able to pay to others time to either work out an equitable payoff plan or to eliminate the debt completely. The persons who owe the money are referred to as debtors, the people they owe the money to are referred to as creditors, and wiping out the debt is referred to as discharging the debt.
