what is filing for bankruptcies

Filing for bankruptcy is a legal process that helps individuals or businesses who owe money get relief from debts they cannot pay and, at the same time, helps people who are owed money get paid from assets or property the debtor has. Bankruptcy cases are handled in federal courts under rules outlined in the U.S. Bankruptcy Code. There are different types of bankruptcies, which are usually referred to by their chapter in the U.S. Bankruptcy Code. Individuals may file Chapter 7 or Chapter 13 bankruptcy, depending on the specifics of their situation. Before filing for bankruptcy, it is important to understand that declaring bankruptcy has a serious, long-term effect on credit and it will remain on the credit report for 7-10 years, affecting the ability to open credit card accounts and get approved for loans with favorable rates. Seeking the advice of a qualified lawyer is strongly recommended because bankruptcy is a specialized area of law that is very complex.