When filing for bankruptcy, you surrender your "non-exempt" property in exchange for forgiveness of your debts. Your property is sold and the proceeds are divided among your creditors, and you no longer owe those debts.
Should I file for bankruptcy?
Filing for bankruptcy is a debtor's most extreme remedy. It is available only once every six years, so once you use it, you are barred from using it again for quite a while, no matter how badly you need it. So don't use it until you understand what you will get out of it and what alternatives you might use instead.
Some people file for bankruptcy when there is little need to do so. Perhaps the problem could have been resolved by negotiating with creditors or getting help from a credit counseling service.
And bankruptcy courts are on the lookout for what they perceive as an abuse of the bankruptcy system. If a debtor has sufficient income to make substantial repayment of debt, the court might dismiss the bankruptcy filing as a violation of the debtor's duty of good faith.
A lawyer experienced in bankruptcy law can help you make the wisest decision about filing for bankruptcy.
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