Of course, bankruptcy is your last resort. It is difficult, but provides a legal recourse for your financial situation.

Bankruptcy is a process 3 steps:

1. You must first file a federal court or state say you are "insolvent" – Which means you do not have cash or assets (things you can buy) to pay your bills.
2. You have to organize a plan repayment with creditors and the court.
3. You Landfill – Concept to settle your debts with creditors for usually an amount less than the original invoice. This gives the creditors a portion of their money.

Advantages and disadvantages:

Advantages

1. Legal protection of creditors
2. Takes care of most of your debts
3. You can get to keep your home
4. May stop financial ruin
5. Allows a new start

Disadvantages:

1. Bad Credit
2. Always having to pay debts
3. Have to go to court
4. Risk losing your property
5. Loss privacy (usually they print your bankruptcy in the document)

What if I do not file bankruptcy – what could happen?

bad credit – making it difficult to ever borrow again

Creditors can sell your property as collateral you put – as your car or home

Minutes – and if you lose, you have all legal costs of both sides as well as your bills

Garnishment – your Wages may be garnished up to 10% to pay creditors

Types of Bankruptcy

Chapter 7 – bankruptcy right

This is when you sell everything and pay creditors. You can keep your home, but must pay taxes, alimony, fines, and student loans.

Chapter 13

This allows you to keep your business, but the court appoints a trustee to assist you with your salary and pay your creditors in general in the 3-5 year window.

Hopefully, this information has helped you, but please, it is always smart and sometimes required by law to consult a lawyer before testifying.

Stuart Simpson collects information and tries to find ways for people to stave off bankruptcy at http://www.bankruptcy-chapter7.com