| People suffering from debts and in financial difficulties | | | | student loans or any injury caused while under the |
| can take recourse to bankruptcy. Each country has | | | | influence of alcohol or drugs. |
| its own definition for bankruptcy. In US, the | | | | There are various provisions and options available |
| Bankruptcy Code offers protection to people who | | | | when a bankruptcy petition is filed. |
| are bankrupt. | | | | Depending upon the law of the state of domicile, |
| Under this code people who have undergone divorce | | | | some personal items can be retained while control of |
| proceedings, loss of jobs, theft of identity, mounting | | | | all assets and property is entrusted to a trustee. |
| medical bills or disability can get relief. Normally, | | | | Property with some value will be disposed of by the |
| unexpected situations combined with some other | | | | trustee and the cash proceeds will be used to pay |
| disasters in personal life create the financial woes. | | | | money to the creditors. |
| Credit card debts, which were earlier found to be | | | | Under a different provision, property can be detained |
| easily manageable suddenly, become very difficult to | | | | by the debtor if he/she is earning regular wages or |
| manage when combined with the loss of a job. | | | | getting regular income from various sources. An |
| When all hope is lost, a new beginning can be created | | | | agreement stating that part of the income or wages |
| with the help of a good lawyer specializing in | | | | will be used for part payment to the debtors under |
| bankruptcy, by making use of the provision of the | | | | the approval of the court. A trustee will receive the |
| Bankruptcy Code. | | | | payments from the debtor and arrange to pay the |
| A petition to stop creditor harassment filed under the | | | | same to the creditor and will ensure the debtor |
| relevant clauses will result in an "automatic stay" | | | | honours the terms and conditions of the repayment |
| order from the court. | | | | plan. |
| With the automatic stay, the creditors are prohibited | | | | Bankruptcy by businesses is covered under a special |
| from further action to collect their debts forcing | | | | arrangement, which permits the business to continue |
| them to stop calling often or sending reminders. | | | | the operations subject to the approval of the |
| Foreclosure of home or repossession of car is not | | | | repayment plan by the court and the creditors. |
| going to be a big concern or worry. | | | | Usually a trustee is not appointed if the judge feels it |
| A procedure to set right the financial management is | | | | is not necessary. If a trustee is appointed then the |
| also possible with the filing of a bankruptcy petition. | | | | property and business comes under the trustee's |
| Automatic stay of nonpayment of debts does not | | | | control. |
| include most of the taxes, support for children, | | | | |