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Not every one is eligible to file for bankruptcy, but for those that can it is the chance to get a fresh start from the debts you have accumulated over the years, although this is not something that is automatic. The state of your finances, your assets and your liabilities, your monthly expenses and your monthly income are all taken into account, along with the total debt you owe to your creditors. Your monthly income is obviously important, as this is what you will be living on during the period of your bankruptcy.

During this time, you will have no line of credit, and no credit cards, you will live totally on the income you bring in.

You may have seen a credit counsellor before filing for bankruptcy to find out about your financial options, and they may direct you to see a trustee for bankruptcy who will investigate your situation more thoroughly to see whether you qualify, and whether you will be able to live during this time. Once you have completed the paper work, the information will be filed by your trustee on your behalf at the bankruptcy courts. You may requested to attend a meeting of your creditors should they request one so they can understand why you have all this debt, and there may be an interview with the Superintendent of Bankruptcies too, for him, or her to understand your particular situation.

While you are in bankruptcy protection, your creditors will not contact you. Should they do so, you refer them to your trustee to deal with, and provide them with the appropriate contact information.

Every month you will need to send your trustee your statement of income and expenses, and should there be extra income above the level you are allowed by the court, then a portion of this will be forwarded to the trustee to be shared between your creditors.

Now the length of your bankruptcy can vary, and the whole process undergoes regular changes to this system. Because of the economy and the increase in the number filing for bankruptcy, the regulations and rules for bankruptcy have become even more strict, and the length of bankruptcy has been extended too in some states. The length of time does depend on your financial situation, including whether you are able to pay back your creditors any of the money that you owe them, and various other considerations, including how you have responded to any questions asked by your trustee, and whether you attended the necessary credit counselling sessions.

The important thing to focus on, is that at the end of this period, you will be discharged from your debts and bankruptcy, provided all is well, freeing you from the debt that you gathered. After that it is up to you to stay out of debt in the future, and by paying for everything with cash, you will be able to do this.

Tags: bankruptcy, bankruptcy discharge, bankruptcy trustee, credit after bankruptcy, filing for bankruptcy