Personal bankruptcy is a procedure which, in certain jurisdictions, allows an to declare Personal Bankruptcy. In other jurisdictions, bankruptcies are reserved for corporations.

A personal bankruptcy is a form that when filed will discharge obligations to creditors. Bankruptcy forms can be located online or an attorney can prepare one for you.

Contrary to popular belief, personal bankruptcy does not discharge all debts. Specific types of student loans, called secured student loans, must be paid even after some one has filed bankruptcy. Also, it won’t discharge taxes owed to the state or federal government. Likewise, child support payments and money owed to victims of drunken driving accidents will still be required to be paid.

Personal Bankruptcy does however discharge ‘unscheduled debts’. Unscheduled debts are things like money owed to creditors, which include credit card companies, auto loan lenders, and money owed to personal contacts that lent you money. These creditors and others who are owed must line up to try and get any property not exempt under their state’s exemption laws. Those who are deemed most worthy get their pick of the debtor’s bankruptcy estate first, and on it goes until nothings left but assets that are exempt from being taken under that state’s laws.
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