At its most basic level, bankruptcy is a means for honest, hardworking people to obtain relief from overwhelming debt. Some types of bankruptcy erase most debt altogether, while other types allow people and businesses to restructure their debt so they can make payments to their creditors while still making ends meet.

Bankruptcy is mainly governed by federal law; however, state consumer and commercial laws do carry some influence.

At one time, bankruptcy carried a heavy stigma. Today, however, it is viewed as a means of obtaining a fresh financial start. Since bankruptcy is often the result of severe distress, such as divorce, death of a family member, illness, disability, or business failure, lenders often look at consumers who have filed for bankruptcy with a more sympathetic eye.

These are the types of bankruptcy that may be filed by consumers and businesses:

• Chapter 7: Often called "straight bankruptcy", Chapter 7 completely releases you from most of your debts, except for student t loans and child support payments. If you are making payments on a car or home, and you want to keep these assets, you'll make arrangements with your creditors to keep paying for them.

• Chapter 11: A "reorganization" type of bankruptcy that allows business owners to make payments to creditors while still operating their businesses. This type of bankruptcy may be the best option if your business has significant income and assets.

• Chapter 12: A special type of bankruptcy for farmers and family fishermen. This type of filing is easier and less expensive than Chapter 11, but allows for the reorganization of greater debt amounts than Chapter 13.

• Chapter 13: Often called "wage earner's bankruptcy", this type of filing does not erase personal debt; rather, it gives you the chance to make payments to your creditors over a period of time - usually 3-5 years. It allows you to keep your assets while still reducing your debt.

• Chapter 7 and Chapter 13 bankruptcies may be voluntary (initiated by you), or involuntary (initiated by your creditors).

You've worked too hard to continue struggling with debt problems and dealing with harassing creditors. There are solutions that can help you get back on track, rebuild your credit, and get back to your life or your business.

If you require assistance in a bankruptcy matter, please call us at (917) 226-6884 or click here for an immediate e-mail inquiry.