What is Personal Bankruptcy?

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Posted by Manager in Latest Developments on 07/19/2009

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Personal bankruptcy is the process of declaring oneself insolvent in the event of an individual being unable to pay off his or her debts. It is the last resort for a person to declare them bankrupt. It happens when the rate of the increase of the person’s debt is more than his or her ability to pay it back. Bankruptcy is entered into with the help an attorney who determines if there are any alternatives to declaring oneself bankrupt. It involves listing of debts and liabilities along with a list of assets and other properties owned by the person. The accounts of the person are then frozen and no further accrual of monies into the accounts is possible.

There are two types of personal bankruptcies. One type is Chapter 7 bankruptcy and the other type is Chapter 13 bankruptcy. The difference between the two lies in the manner in which the court allows some assets to be retained by the individual. All the transactions for a particular individual are frozen once the person files for bankruptcy. It is better to consult with an attorney before you decide on filing for personal bankruptcy. The attorney would be the best person to judge on what kind of bankruptcy that you should file for. Be sure to include everything that you need to declare before the attorney and ultimately in the court.

Filing for personal bankruptcy can be a traumatic experience if you have not planned on the way in which the filing has to be done. It is better to take expert advice and lessen the blow of filing for bankruptcy. There are enough number of attorneys would help you out with the process for a fee. The process can be less painful if you approach the right attorney. For this you need to do some verification about the kind of attorney you would need for help and advice. Once you have zeroed in on the right attorney, you should come clean about your assets and liabilities. Only then can the attorney or the legal process be of any use to you and the process of filing for bankruptcy.

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