Most bankruptcies in the United States are due to unforeseen illness and the medical bills that accompany it. Even with solid health insurance you can still get in over your head due to the increasing medical costs. There is no shame in admitting that you are in over your head and you need some relief. The whole point of bankruptcy is to give honest people a much needed fresh start.

If you have decided bankruptcy is the best option for you, you need an experienced bankruptcy attorney on your case. The laws and processes are so complicated, even more so with the recent changes, that it is almost impossible to handle it on your own. A good bankruptcy lawyer will help you decide which type of bankruptcy you qualify for and works best for you. If you are currently facing foreclosure or repossession and would like to keep these assets you can file for Chapter 13 relief. This type of bankruptcy allows you to repay sometimes reduced debt back over a 3-5 year period. It lets you keep your home and vehicle as long as you keep up on the payments and lets you get caught up on back payments. This is a good option for people with steady incomes and valuable assets. If you have a certain level of income, you may have no choice but to file Chapter 13. A judge will decide if you are at the level of debt and income that will allow you to repay your creditors over a period of time. If you are low income and have no real assets you can file for Chapter 7. Chapter 7 is known as the liquidation plan. Your case is turned over to a trustee who will sell any assets not covered on the exemption list and any funds that are recovered are distributed to your creditors. According to the new changes to the law you must attend credit counseling prior to filing in the bankruptcy court. This gives you a chance to explore another option. Before your case can be discharged, you also must attend a financial skill’s class. In the case of Chapter 7 bankruptcy your case is usually discharged within four months of filing while Chapter 13 is discharged after you have completed your repayment plan. There used to be a stigma attached to bankruptcy but that is in the past. Many people have found themselves in need of this fresh start and benefited from it.

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