Bankruptcy law is always evolving, but the vast majority of the rules and regulations governing bankruptcy law are still rooted in the major sweeping changes of these laws just a few short years ago. While some states also have specific laws concerning bankruptcy, in each and every case where the state law conflicts with the federal law, the federal law takes precedence. Therefore, it is rarely to one's advantage to file bankruptcy in another state other than your state of residence, even if that could be done, which is extremely difficult in most cases.



There are three major areas of bankruptcy that almost all consumers and businesses fall into, which are known as chapters. Chapter 13 of the bankruptcy law is used by consumers who have the resources to pay off their debts over time, usually from three to five years. It is very important to note that while this is still termed bankruptcy, the consumer's debts are not eliminated, but rather the court intervenes to give them additional time to pay off their debts, and the creditors need to comply, regardless of the state of being past due.

By contrast, chapter 7 bankruptcy is the one most people think of when they are considering this drastic step to wipe out their financial debt. This is the most drastic type of bankruptcy and may also involve liquidating some of your assets to help pay off the debt, where your assets are classified as either exempt or non-exempt.

Chapter 13 bankruptcy is used by individuals to reorganize their debt and is typically the type used by businesses. Like chapter 7, it is important to note that this is reorganization under the protection of the bankruptcy courts, and it does not wipe out your debts.

Regardless of which type of chapter you are looking at, you must also be aware that there are certain types of debt that cannot be discharged, and perhaps not even reorganized, even with chapter 13. So if a major portion of your debt is made up of these types of debts, then filing bankruptcy is not going to do you much good at all.

If you study the law carefully, you can use bankruptcy to your advantage. But this is a very complex subject and takes intense scrutiny. Studies have indicated and interviews with filers have shown that the vast majority of people who have filed bankruptcy wished that they had done so with the help or at least supervision of a qualified bankruptcy attorney. Like anyone else who works in their field of study full time, such people are extremely qualified to know and understand how the law works, and in each individual situation, how those laws can be applied to your particular greatest advantage.

Since bankruptcy is considered a drastic measure, you will clearly want to consider what other options may be open to you. One option that is overlooked frequently is how debt consolidation services work, which can provide the necessary financial breathing room for you without the long-term negative affects that bankruptcy filing brings with it, acting very similar to bankruptcy. Our web site discusses debt consolidation as an option for you to consider before jumping in with both feet.

Your best bet to understand if bankruptcy law can work to your advantage or if you have other viable options is to take a free bankruptcy evaluation. There is a link at our web site for this, where your particular situation can be analyzed and recommendations made by a qualified bankruptcy lawyer local to you. When you have your options in front of you, it is easier to select which one will be best for your situation and circumstances.