What is bankruptcy? What happens in a bankruptcy case? Bankruptcy is a legal process that provides relief for individuals who can no longer pay all of their debts. If you are considering bankruptcy, this video will give you basic information about the process, the relief it offers, and how to find the legal help you may need. SOURCE: Federal Judiciary Channel (YouTube)
TRANSCRIPT:
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The following program was produced
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by the United States Courts.
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If you are considering bankruptcy,
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this video will give you basic information about the process,
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the relief it offers
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and how to find the legal help you may need.
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Thank you for watching this video on Bankruptcy Basics
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This video will explain what bankruptcy is and what happens in a bankruptcy case.
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This information is provided to help consumers – individuals like you – understand the bankruptcy
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process.
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People who are having trouble paying their debts
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sometimes consider bankruptcy as a remedy for this situation.
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Bankruptcy is a legal process
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by which you can deal with your debts when you can no longer pay them.
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By filing bankruptcy, many individuals find that they are able to get most, if not all, bills
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discharged,
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meaning
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wiped out;
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keep most, if not all, of their property;
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and/or get extra time to pay bills
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if you have a regular income.
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An individual, call or texted a debtor,
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usually files bankruptcy to obtain a discharge,
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which will wipe out all or most of his or her debts
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so that they will not have to be paid.
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A married person may file alone or with the person’s spouse.
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Once the bankruptcy begins,
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creditors cannot try to collect debts from the bankruptcy debtor or sue the debtor to
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obtain a judgment.
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With a few exceptions, the creditors have no claim on the debtor’s future income
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or future assets.
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Bankruptcy is not the only method of dealing with too much debt.
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In some situations, another way might be more advantageous to the debtor than filing bankruptcy.
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Such alternatives may include an out-of-court settlement with creditors,
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reduction of payments to creditors,
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attaining help from a consumer credit counseling service,
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or payment of debts by sale of assets or borrowing on assets.
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However, these methods require some cooperation from creditors,
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and the chances of success are greater
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if the debtor attempts these alternatives soon after financial difficulties begin.