While trying to get your finances under control, you may get to the point where you feel it's necessary to consult with a bankruptcy attorney. In the American legal system, bankruptcy is set up to enable people and businesses to get things back on track. You'll be obliged to make an effort in good faith to pay your debts back, but the system is designed to ensure only that you do so to the best of your ability under the circumstances. If you're thinking about filing for bankruptcy relief, here's what you should know.

It Can Make Creditors Stop Harassing You

When you file for a bankruptcy petition, there is an automatic process where the court issues a protective order. This is a stay that informs your creditors that they need to stop contacting you about the matter while it is under the court's consideration. In most cases, the stay will also be extended to the period during which you're engaged in structured repayment of your debts. So long as you continue to make payments within the court's requirements, you'll be protected from creditor harassment. If creditors need to contact you at that point, they must do so either through the court or through your bankruptcy attorney.

How Different Types of Bankruptcy Work

There are three common types of bankruptcy filings. These are known as Chapter 7, 11 and 13. Chapter 11 is largely meant for the use of businesses and some farms, and Chapters 7 and 13 are typically invoked by individuals and families.

The Chapter 7 filing process is intended to be the quickest of the options. The goal is to liquidate as much of your available assets as possible in order to retire as much of the incurred debts as possible. When a Chapter 7 process is completed, you will only have enough resources to address basic life and work needs. For example, an individual who owns a car and truck would have to show which one was more practical. If they're a contractor and need the truck to continue working, that would likely be the vehicle they could keep.

Chapters 11 and 13 are restructuring programs intended to delay debt collection rather than retire debts. At the end of it, your intention is to resume payments, but the court will give you time and help you set up a plan that fits your present financial situation.

For more information, contact a local bankruptcy attorney.