Each year more than 1,200,000 Americans file for protection under federal bankruptcy laws, according to American Bankruptcy Institute. Some are credit abusers or are financially irresponsible. But average working men and women who try to pay their bills on time can sometimes find themselves in financial difficulties, as well. The sudden loss of a job, catastrophic medical bills, soaring credit card interest, student loans, a divorce or even a natural disaster can quickly wipe out a life's savings. For many, bankruptcy provides a second financial chance.

Bankruptcy is usually used only as a last resort, after other attempts to solve a financial crisis have failed. You may want to talk to an attorney specializing in bankruptcy or a credit counselor to see if you really need to file for bankruptcy. Perhaps an agreement can be reached with your creditors before you take this final step.

Bankruptcy can relieve honest but unlucky debtor from crushing burden of excessive debt by providing a fresh start. It allows you to discharge some of your debt or allows you to get back on your feet without harassment by creditors. For many people decision to file for bankruptcy is difficult. You may think that bankruptcy is a sign of failure or an indication that you are incapable of managing your own financial affairs. In reality, most people who chose to file for bankruptcy intend to pay their bills, they simply do not have resources available to do so. By filing for bankruptcy, you get a fresh start with a clean slate, free of stress and guilt that result from evading or fighting your creditors.

At same time, decision to file for bankruptcy should be carefully considered and not be taken lightly. It is, after all, a Federal court proceeding which can affect your legal right to keep or use your property. And once you start a bankruptcy case, it is near to impossible to stop.

There are two primary types of bankruptcy available to individuals. In Chapter 7, your nonexempt assets may be sold to pay creditors while most of your debts are discharged. In Chapter 13, you prepare a reorganization plan to pay off your creditors either in full or in part. Once you file a bankruptcy petition, an automatic stay prevents creditors from starting or continuing legal procedures against you.

Talk about giving industry a bad name!

I worked for a mortgage lender until quite recently and I used to be shocked at fees that brokers charged their clients. I mean lets put this whole "mortgage arranging" thing into perspective.

Assume I am meeting a client today. The guy walks into my office and sits down and has a chat with me about getting a mortgage.

It appears that he is not a "clean" client as he is suffering from a few credit problems. Well, I stroke my chin and let out a couple of sighs but wait, I CAN HELP HIM.

I tell client that it is going to be difficult but I think I can help him. There may be a few "fees" but hey, at least he is going to get a mortgage and that is all he cares about isn't it?