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Many people thinking about bankruptcy have experienced a significant life event such as a serious injury or illness, a divorce, or a change in employment. Others may have taken advantage of easy access to credit and found themselves unable to stay afloat. And some simply find that their incomes have not kept pace with the rising cost of living in the economy.

As a result, foreclosures, repossessions, lawsuits, and [spin}intimidating|threatening[/spin] letters and phone calls from creditors have become more routine. Bankruptcy offers a way out and a fresh start. Chapter 7 Bankruptcy allows individuals to eliminate or “wipe out” all of their allowable debts.

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Many people have questions and apprehension about Bankruptcy. They think that they will lose everything or never get a car loan or mortgage again. In actuality, most people who qualify for Chapter 7 Bankruptcy will keep their house, cars and nearly all their possessions. Most individual property is protected in bankruptcy.

There are many legal matters surrounding filing for bankruptcy. Finding good Bankruptcy Attorneys can benefit you in many ways. Bankruptcy Lawyers are specifically trained to handle bankruptcy cases. They are up to date on all of the ever changing bankruptcy laws. Your bankruptcy lawyer can answer all of your questions and explain what to expect every step of the way through the procedure, including forms to fill out, required credit counseling, hearings to attend, the role of the trustee, which debts may not be discharged, and more.

When you file for bankruptcy, an “automatic stay” immediately goes into effect. This automatic stay stops creditors from doing anything to collect the debts you owe them (unless the bankruptcy court allows otherwise). This will stop all phone calls, letters, lawsuits, garnishments or any other form of collection. Again, your Bankruptcy Lawyer can help you comprehend the “automatic stay” implications as well.

Typically, within 60-90 days of filing bankruptcy, the court grants your discharge and you are officially released from having personal liability for any discharged debt. Now is the time to begin credit repair. As you begin making on time payments on new debt, you can regain your credit rating within a fairly short time. In some ways, filing bankruptcy may actually help your credit score because discharging your debts improves your debt to income ratio, which is one of the factors that creditors look at when judging your “creditworthiness”. This can take place even though the bankruptcy filing will still be noted by the credit reporting agencies for 7 to 10 years.