Filing for bankruptcy does have some advantages. Once bankruptcy is filed, most debt collection must stop at least temporarily, and further collection efforts are allowed only if the bankruptcy court gives permission. In addition, a debtor who goes through bankruptcy is given a fresh financial start. The debtor will be able to keep some assets, depending on your states laws.

However, filing for bankruptcy also has its disadvantages. Information regarding bankruptcy stays on your credit report for ten (10) years. Someone who has filed bankruptcy may have difficulty getting credit or may be offered unfavorable terms. In addition, someone who has filed for bankruptcy may even have difficulty renting an apartment.

A fundamental goal of bankruptcy laws, is to give debtors a financial “fresh start” from burdensome debts. The Supreme Court made this point about the purpose of the bankruptcy law in a 1934 decision.

"Bankruptcy gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt."

The bankruptcy process is governed by the Federal Rules of Bankruptcy Procedure (often called the “Bankruptcy Rules”) and local rules of bankruptcy.The court official with decision-making power over federal bankruptcy cases is the United States bankruptcy judge, a judicial officer of the United States district court.The bankruptcy judge may decide any matter connected with a bankruptcy case, such as eligibility to file or whether a debtor should receive a discharge of debts.Much of the bankruptcy process is administrative, however, and is conducted away from the courthouse. Courts generally have their own clerk’s offices.

Your involvement with the bankruptcy judge will usually be very limited. In most chapter 7, 12 and 13 cases, (and some 11) the court-appointed Trustee carries out the administrative process.

• Typically a chapter 7 debtor will not appear in court and will not see the bankruptcy judge unless an objection is raised in the case.
• A chapter 13 debtor may only have to appear before the bankruptcy judge at a plan confirmation hearing.
• Usually, the only formal proceeding at which a debtor must appear is the meeting of creditors, informally called a “341 meeting” which is usually held at the offices of the United States trustee.
• Section 341 of the Bankruptcy Code requires that the debtor attend this meeting so that creditors (at least those that show up) can question the debtor about debts and property.

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