People who have more debt than they can pay off may be in a dire situation, but they do have some options available. It is advisable to speak with a lawyer in these situations who can explain whether or not filing for bankruptcy is the best option.

Debtors are required to prepare and file a voluntary petition along with various supporting documents. A good bankruptcy attorney should be able to assist in preparing this set of documents. The debtor will be required to give information regarding their earnings, expenses, possessions, and debt. These documents will then be filed with the clerk at the U.S. Bankruptcy Court.

After the proper submission of all documentation, the case is assigned to a court appointed trustee who verifies the paperwork and makes certain all the information is complete and accurate. The trustee will give notice to the creditors about the bankruptcy hearing. Once the trustee has informed the creditors about their bankruptcy filing, they are required to stop every act against the debtor to collect the debt. The trustee will also handle the nature of the debtor's assets and oversee their case.

After the debtor has finished filing the actual bankruptcy, it is advisable for them set up a meeting between their attorney, the trustee, the creditors, and, if possible, the creditors' lawyers. This is the ideal time to raise any and all questions and objections. The debtor and their lawyer should work with the creditors to arrive at settlements at this time.

The debtor will then attend a hearing with a U.S. District Court Judge. The Judge will discharge the debtor's case of debt for a Chapter 7 or approve your payment plan for a Chapter 13.

Before taking the big step and filing for bankruptcy, the debtor may want to do some reading. They will need to hire a good lawyer who is well versed in the law. With the new bankruptcy laws, debtors need someone who is able to understand and best utilize the new changes.