What is bankruptcy?

Bankruptcy is a legal process which helps individuals and businesses restructure their finances. When a person or business files for bankruptcy, they are asking the court to help them manage their debt and discharge some or all of it. A court-appointed trustee assesses the financial situation of the individual or business, and then decides whether or not the debt can be discharged. In Kansas, bankruptcy is usually filed under either Chapter 7 or Chapter 13. Chapter 7 bankruptcy is the most common type of bankruptcy in the state. Through Chapter 7, debtors can often eliminate all of their unsecured debt, such as credit cards and medical bills. Chapter 13 bankruptcy allows a debtor to restructure their debt and create a payment plan with their creditors that must be approved by the court. When a debtor files for bankruptcy, all creditors are notified and must stop trying to collect payments. Additionally, the debtor can receive protection from creditors through an automatic stay, which stops creditors from trying to contact or collect payments from the debtor. Bankruptcy is a powerful tool for those struggling with debt. However, it can have long-term consequences, so it is important for debtors to consult with an attorney to evaluate their individual situation before filing.

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What is bankruptcy?

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