If a debtor is having difficulty with keeping up to date with paying their bills and is continually being contacted via telephone by collection people, is bankruptcy the debtor's only option?

No, bankruptcy is not the debtor's only option. The debtor basically has two alternatives to bankruptcy. 1) The debtor may make arrangements directly with the creditors to get extended and reduced repayment conditions or 2) the debtor may use a credit counseling service to deal with the creditors. The main disadvantage to either of these options is that it requires all creditors to willingly cooperate. In contrast, if the debtor files bankruptcy, the creditors have no choice but to accept the program.

What are the different types of bankruptcy that are available to the consumer debtor?

The debtor would have a choice between a chapter 7, chapter 13, and chapter 11 bankruptcy. Also, if the debtor were a family farmer, they would have the option of a chapter 12. The two chapters that are commonly available to consumers are a chapter 7 liquidation or a chapter 13 adjustment or workout plan.

How does the debtor make a decision as to which chapter is best for him/her?

It usually comes down to deciding between a chapter 7 or chapter 13 because a Chapter 11 is a business reorganization and is too unmanageable and costly for consumers and a Chapter 12 is limited to farmers. It depends on the circumstances of the debtor whether he/she should file a chapter 7 or chapter 13. The first question to ask is, after taking into account everyday living expenses, rental, house payments or car payments (but not payments on credit cards or other debts), does the debtor have any income left over? If the answer is no, the only option is a chapter 7. If the answer is yes, then chapter 13 should be considered. In fact, if the leftover income is large enough, chapter 13 may be the only available option.

Will everyone have knowledge of a bankruptcy filing?

Most likely not, however a bankruptcy filing is a public record and is available to anyone and depending on the location, bankruptcy filings may be published regularly. However, usually only very few "newsworthy" bankruptcy filings get widespread publicity. Also, Bankruptcy filings are part of the credit bureau records, but access to this information is somewhat restricted. Even though the information is accessible to the public, unless someone makes an attempt to find it, it should not become public knowledge.

What happens if the debtor's employer, landlord, or the gas company discovers that the debtor filed bankruptcy?

Generally nothing should happen if the debtor's employer, landlord, or utility company finds out that the debtor filed for bankruptcy. As long as the debtor keeps up to date with paying the rent, the landlord will most likely not evict the debtor, however, there is no special protection in the law to stop this from happening. However, there is a special provision in the Bankruptcy Code that prevents a utility service from being cut off, but the company may require the debtor to pay an additional deposit. The Bankruptcy Code has another special provision that protects debtors from being discriminated against by an employer.

May a debtor take bankruptcy on just some debts?

No. All of the debtor's liabilities and assets must be disclosed because bankruptcy is an all-or-nothing situation.

Does the Debtor get to keep any property?

Yes, under the law, the debtor is allowed to exclude certain property from the bankruptcy estate and some property is exempt from being liquidated to pay creditors.

How often will the debtor be required to appear in court?

The debtor must appear at the first meeting of creditors and if a debt is reaffirmed a debt; an unrepresented debtor will have to attend the reaffirmation hearing. If the debtor receives any notices of other hearings in connection with administration of the estate, they may need to attend these hearings, but it may not be necessary in most cases. The notice or trustee will probably inform the debtor or the debtor's counsel if it is mandatory that they attend these hearings.