Bankruptcy is a legal proceeding in which a person who cannot pay their bills can get a fresh financial start. The right to file for bankruptcy is provided by federal law, and all bankruptcy cases are handled in federal court. Filing bankruptcy immediately stops all of your creditors from seeking to collect debts from you, at least until your debts are sorted out according to the law.

• $27,900 in equity in your home
• $4,450 in equity in your car
• $14,875 for any household goods and furnishings
• $1,875 in jewelry
• $2,800 in things you need for your job (tools, books, etc.)
• $1,475 in any property, plus part of the unused exemption in your home, up to $13,950
• Your right to receive certain benefits such as social security, unemployment compensation, veteran’s benefits, public assistance, and pensions — regardless of the amount

In most cases, you will not lose your home or car during your bankruptcy case as long as your equity in the property is fully exempt. Even if your property is not fully exempt, you will be able to keep it if you pay its non-exempt value to creditors in a Chapter 13.

Yes! Many people believe they cannot own anything for a period of time after filing for bankruptcy. This is not true. You can keep your exempt property and anything you obtain after the bankruptcy is filed. However, if you receive an inheritance, a property settlement, or life insurance benefits within 180 days after filing for bankruptcy, that money or property may have to be paid to your creditors if the property or money is not exempt.

Yes, with some exceptions.

Bankruptcy will not normally wipe out:

• Money owed for child support or alimony, fines, and some taxes
• Debts not listed on your bankruptcy petition
• Loans you got by knowingly giving false information to a creditor who reasonably relied on it in giving you the loan
• Debts resulting from “willful and malicious” harm
• Most student loans, except if the court decides that payment would be an undue hardship
• Mortgages and other liens that are not paid in the bankruptcy case (but bankruptcy will wipe out your obligation to pay any additional money if the property is sold by the creditor)

In most bankruptcy cases, you only have to go to a proceeding called the “meeting of creditors” to meet with the bankruptcy trustee and any creditor who chooses to come. Most of the time, this meeting will be a short and simple procedure where you are asked a few questions about your bankruptcy forms and your financial situation.

Occasionally, if complications arise, or if you choose to dispute a debt, you may have to appear before a judge at a hearing. If you need to go to court, you will receive notice of the court date and time from the court and/or from your attorney.

There is no clear answer to this question. Unfortunately, if you are behind on your bills, your credit may already be bad. Bankruptcy will probably not make things any worse.

The fact that you’ve filed a bankruptcy can appear on your credit record for 10 years. But because bankruptcy wipes out your old debts, you are likely to be in a better position to pay your current bills, and you may be able to get new credit.