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The material presented here is adapted
from the Making Change series by the Foundation for
Human Development, Inc., 2003
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The Big Picture. . . What Is Bankruptcy?
Bankruptcy has pros and cons. Know what you are getting into before you sign up for bankruptcy.
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What Is Bankruptcy?
Bankruptcy helps debtors get relief from debts they can't pay and creditors get satisfaction from assets the debtor can give up and still survive. Bankruptcy is governed by the federal law found in Title 11 of the United States Bankruptcy Code.
Bankruptcy is a legal procedure that serves as a "last resort" for people who cannot pay their bills. A decision to file for bankruptcy is a serious step. You'll have to give up everything that isn't a necessity, and use the money to pay off your creditors. Creditors are given priority by a court. Once your assets are distributed, you will be free from most of your obligations, even if your debts are not all paid off.
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