Bankruptcy can bring more problems with it than you might expect… especially if you're not entirely sure what bankruptcy is. Luckily, there are a variety of online resources that can not only educate you as to the ins and outs of bankruptcy but can also assist you with your filing or help you to find an alternative to filing for bankruptcy.

Of course, the topic of bankruptcy is rather broad and can't be completely covered within the limited scope of this article. Instead, this article is simply meant to point the way to further information and to possibly help answer some questions that you might have concerning bankruptcy.

If you have questions that can't be answered with the information provided here, you should consult an attorney or bankruptcy specialist in your area to make sure that you have the best information that pertains to you and your personal situation.

What Bankruptcy Is

Bankruptcy is a legal filing that makes the claim that you are in debt to the point that you cannot reasonably recover without the assistance of the courts. When you file for bankruptcy, a court-appointed representative will go through your debts and recommend to the court that some of the debts be discharged (meaning that they are legally excused and no longer have to be paid), and other debts may be reduced.

This representative will then work with you and your creditors to create a repayment plan which will be overseen by the court system; in most cases the amount to be repaid is deducted automatically from your payroll cheque before you even get a chance to see the money. These deductions will continue until the remaining debt is paid off, after which point the bankruptcy itself is discharged.

It's important to note that not all eligible debts will be discharged, and that not all types of debt are eligible for discharge. The court will usually only discharge those debts that it is obvious that you won't be able to pay, and any property that you have which is under lien is likely to be sold as a part of the bankruptcy process. Court-appointed debts such as child support and alimony payments are never discharged, and will still be due after the bankruptcy.