Bankruptcy is a process established by a set of federal laws that is designed to give debtors a “fresh start” by canceling many of their debts through an order of the court.
Bankruptcy also allows creditors who are owed money a chance to get their designated share of any money the debtors can afford to, or are obligated to, pay back.
When a bankruptcy is filed, creditors have to stop any attempt to collect a debt, at least temporarily. There is usually immediate relief from creditor pressure, and a bankruptcy can stop a pending foreclosure sale of your home, a garnishment of your wages, or a threatened repossession. Most creditors cannot call, write or sue you after you have filed bankruptcy.
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This content is provided by DaveRamsey.com and may be used only in its entirety with all links included. Dave Ramsey is changing the face of America by helping people avoid bankruptcy and get on the path to being debt free.
Added to http://www.be-debt-free.info/ on May 17, 2008.
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