Bankruptcy is a financial tool of last resort for people who become unable to meet their debt obligations. The effect of filing bankruptcy is to discharge most or all consumer debts, while still allowing the filer to keep certain assets and property. After all, the purpose of the proceeding is to keep people off the street, not put them out on it.

Laws regarding bankruptcy vary, from state to state, and change from year to year. In general, it’s more difficult to declare bankruptcy, today, than it was several years ago. There are two main types of bankruptcy that consumers and organizations typically consider. Chapter 7 is the most common. With Chapter 7, eligible debts are discharged. This is also referred to as liquidation. Chapter 13 is less extreme. Known as reorganization, Chapter 13 bankruptcy involves the creditors and debtor agreeing to a restructuring of debt that will allow the debtor to meet their obligations. The judge may require that some debt be forgiven, but, ultimately, Chapter 13 is for those who are able to pay their debts with a little help.

Filing for bankruptcy is not easy. While some people have published books and websites that offer advice and propose a “do-it-yourself” approach to bankruptcy, that route is not advisable. A non-lawyer may be unaware of certain nuances in the law that can save more of his or her money and property. It would be tragic to see more of your assets taken, than needed to be, all because you relied on a book rather than an actual lawyer.

Not just any lawyer will do, of course. Call around to local law offices and identify those who are especially qualified to deal with bankruptcy matters. Ask for some quotes, and ask if an initial consultation is free. When you go to the first consultation, be sure to take along all relevant data, such as monthly income, monthly debt costs, list of creditors and list of real assets. The lawyer can take that data and make a personalized recommendation for your case.

Fear of confrontation or shame prevents many people from filing for bankruptcy. Waiting until you’re completely broke is not a great strategy. You need some money in the bank to live on after the proceedings are over. The only required court date is what’s called a creditors meeting. You, your lawyers and creditors will meet together and discuss terms of the bankruptcy. It sounds stressful, but remember that the representatives of the creditors have nothing personal against you. They won’t be abusive or rude. Similarly, people sometimes worry that friends and associates will be ashamed of them after filing bankruptcy. However, the proceedings are private by law, and it’s illegal to discriminate against anyone who has declared bankruptcy in the past.

In short, filing for bankruptcy is a two-step process. First, gather one’s relevant paperwork and choose a qualified lawyer. Second, attend the required administrative meetings. After that, make an effort to take more ownership of one’s finances, so that bankruptcy will never again be a necessity.