They may have accumulated more debt over time than they could possibly pay, or they may have suddenly found themselves with a lot of unexpected expenses, causing them to be unable to pay them all.
It can be a very frightening and overwhelming experience.
It may seem like their lives are in complete disrepair, but after filing bankruptcy, it is possible to make a fresh start and begin rebuilding your credit and your way of life.
Many people aren't sure exactly what it means to file for bankruptcy.
They may worry about losing their home, car, or belongings, but most people are able to keep their personal belongings and non luxury items even after personal bankruptcy.
If a person just does not have the means to pay back all their debts, bankruptcy is a legal possibility allowing them to report this inability to pay.
This can help to get rid of some of their debts, and it will stop the creditors from harassing them over the phone.
Some types of debt can't be gotten rid of with bankruptcy, however.
It needs for you to contact your attorneys.
Some kinds of debt, such as student loans, cannot be erased in this way.
Alimony, child support payments, and some kinds of divorce related payments may also remain.
Does filing personal bankruptcy ruin your credit? If you're thinking about bankruptcy, you aren't able to afford all your bills in the first place.
If you can't pay your bills, your credit was probably already bad, or on its way there.
At least with bankruptcy, there may be a light at the end of the tunnel.
Reducing your debts this way can make it easier for you to rebuild your credit over time, and to get out of debt.
So whether or not it ruins your credit can be a hard question to answer.
The bankruptcy may show up on your credit reports for the next ten years.
This might make it hard for you to open new lines of credit.
On the other hand, it offers the possibility of a fresh start, so that you can rebuild your credit and improve it over time.