1. What is bankruptcy? What type of bankruptcy is right for me?

Bankruptcy is a federal legal proceeding that provides debtors with a form of relief. ┬áChapter 7 bankruptcy, also know as “straight bankruptcy” or a “liquidation,” is generally appropriate for debtors with a large amount of unsecured debt (like credit cards or medical bills). ┬áChapter 7 bankruptcy involves discharging or eliminating all debt and turning over all property that is not “exempt.” ┬áChapter 13 is usually appropriate for debtors who have a regular income that have fallen behind on mortgage or auto payments and involves working out a plan to make reduced payments over a three or five year period. Determining whether Chapter 7 or Chapter 13 is best for you requires an evaluation of your income, assets and debts and is best done with the assistance of a bankruptcy attorney.