The onset of the economic crises has more and more people thinking of going bankrupt, or filling for bankruptcy.

Some might view going bankrupt as a way of solving all their financial problems and putting an end to debt collectors, bills, and nagging creditors. But going bankrupt is not without its problems, and will affect your life for years to come. It can also be hard to swallow your pride and file for bankruptcy.

Going bankrupt has nothing to do with being "rich" or "poor", in fact, most people that file for bankruptcy can be considered "rich".

Before you file for bankruptcy, make sure that you have exhausted all other possible solutions. A bankruptcy filling is going to remain on your credit report for up to ten years and will make it hard to get any kind of a loan during that period.

Before going bankrupt you will also have to submit to credit counseling to make sure that there are no other alternatives.

There are two types of bankruptcies one can file. A Chapter 7 bankruptcy and a Chapter 13. Most individuals will be forced to file a Chapter 13 bankruptcy that allows for some type of repayment plan to be worked out. In a Chapter 7 Bankruptcy filing your available assets will be liquidated to repay your debt. There will be no additional payments after this liquidation.

It is highly recommended that you find a bankruptcy lawyer to help you through the process. The total cost of filing for bankruptcy will usually vary between $1300 and $2100.

Once you file for bankruptcy an "automatic stay" goes into effect. What this means is that no creditor or collection agency can contact you concerning your debt. Any creditor that breaks this "automatic stay" can be held responsible.  Make sure you report any violations to your lawyer.

The next step is the meeting of creditors. At this meeting you will be required to list all your debts as well as your assets. With the exception of student loans and tax bills, most debt is eligible to be included in a bankruptcy filing.

Do not intentionally increase your debt prior to filing for bankruptcy. If creditors can show that you intentionally incurred debt that you knew you would not pay, this amount can be excluded from your bankruptcy filing.

If you filled for Chapter 7, and about two months after the creditors meeting, assuming there wasn´t a lawsuit challenging the discharge of a particular debt, you will receive notice of a discharge of debt.  If you filled for Chapter 13 you will only receive the notice after the agreed upon repayment period is exhausted.

Although a bankruptcy filling will stay on your record for up to ten years, you should start working on improving your credit report shortly after going bankrupt. This will pay-off in the long run.

This includes paying your monthly bills off on time every month. Remember, some of these bills get reported to credit reporting agencies. Also, don´t apply for too much credit at a time, and don´t use a large portion of any available credit you have.

To rebuild your credit you must get credit and show that you can pay it off. Start off with so called secured credits cards. You will get a credit line equal to the amount of your deposit, but they are reported like regular credit cards to credit bureaus. Use them every month, and pay off your balance in full and on time! Contrary to what is sometimes said, you don´t need to carry a monthly balance or pay interest to improve your credit score.

Finally, order credit reports from all major credit reporting agencies and make sure that any debt discharged as part of your bankruptcy filling is not showing up as overdue. Sometimes this can happen.

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