What is Bankruptcy?
Bankruptcy is a legal method, provided by federal law, of eliminating debt and providing a means to obtain a “fresh start.” In many cases, bankruptcy means the elimination of the debt that you owe to your creditors. There are two primary forms of bankruptcy, Chapter 7 and Chapter 13, used by consumers. Businesses can use Chapter 7 or Chapter 11.
Bankruptcy is the legal method by which a debt-ridden person may eliminate debt and obtain a new financial beginning. The filing of bankruptcy will immediately stop the efforts of creditors from seeking to collect upon debts. In most cases, bankruptcy will completely eliminate the debt one owes to creditors. Federal law provides the right to file for bankruptcy and all bankruptcy cases are handled in federal court.
Individuals who are having difficulty paying their bills as they become due or who are threatened by a creditor with a lawsuit, garnishment or a seizure of property often consider bankruptcy as a solution to their problem. The bankruptcy law is a federal law which is available to individuals throughout the United States in Bankruptcy Courts that are federal courts.
