Not every one is eligible to file for bankruptcy, but for those that can it is the chance to get a fresh start from the debts you have accumulated over the years, but this is not something that is automatic. The state of your finances, your assets and your liabilities, your monthly expenses and your monthly income are all taken into consideration, along with the total debt you owe to your creditors. Your monthly income is obviously important, as this is what you will be living on during the period of your bankruptcy.

During this period, you will have no line of credit, and no credit cards, you will live totally on the income you bring in.

Before you file for bankruptcy to find out about your financial options, and they may direct you to see a trustee for bankruptcy who will investigate your situation more thoroughly to see whether you qualify, and whether you will be able to exist during this time. Once you have filled out the paper work, the information will be filed by your trustee on your behalf at the bankruptcy courts. You may be called to attend a meeting of your creditors should they request this so they can understand why you have all this debt, and there may be an interview with the Superintendent of Bankruptcies too, for him, or her to understand your particular situation.

While you are in bankruptcy protection, your creditors will not contact you. If they do, you refer them to your trustee to handle, and provide them with the appropriate contact information.

You will have to provide monthly statements for your trustee that show your income and your expenses for each month, and should there be extra income above the level you are allowed by the court, then a portion of this will be forwarded to the trustee to be shared between your creditors.

The length you spend in bankruptcy varies, and the whole process undergoes regular changes to this system. Because of the increase in the number filing for bankruptcy due to the economy, the rules and regulations for bankruptcy cases have become even more strict, and the length of bankruptcy has been extended too in some states. Your time in bankruptcy does depend on your financial situation, including whether you are able to pay back your creditors any of the money that you owe them, and various other considerations, including how you have responded to any questions asked by your trustee, and whether you attended credit counselling as required.

The important thing to focus on, is that at the end of this period, you will be discharged from your debts and bankruptcy, provided all is well, freeing you from the debt that you gathered. After that it is up to you to stay out of debt in the future, and by paying for everything with cash, you can do this.

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