You can usually stop a foreclosure with either a Chapter 7 “straight bankruptcy” or a Chapter 13 “adjustment of debts.” Both are armed with the “automatic stay” – the immediate injunction against just about all creditors’ actions that goes into effect the moment your bankruptcy is filed. But what happens after that depends on whether you file a Chapter 7 or Chapter 13 case, and on what you want to accomplish.

The major bankruptcy options are organized in the U.S. Bankruptcy Code into different “chapters” of the Code. Chapters 7 and 13 are the ones mostly used by people with consumer and small business debt. So if that is your situation, most likely one of those is your best option. But if you are a farmer, rancher or fisherman, Chapter 12 may instead be the most appropriate for you. Chapter 11 can be used by people with an unusually large amount of consumer and/or business debt, but is mostly used by corporations and other business entities. Chapter 9 is for city, county and other governmental bankruptcies.

You should be aware of all your options. Bankruptcy is not the best solution for everyone. If your financial problems look like they can be solved some other way, that alternative should be explored, looking closely at its advantages and disadvantages. Here are three bankruptcy alternatives, along with some of their risks

Don’t we have a moral obligation to pay our debts? If so, isn’t it immoral to discharge our debts in bankruptcy and not pay them?

Yes, we have a moral obligation to fulfill promises that we have made. But that obligation is not absolute. It has to be weighed against other moral obligations we may have. We may well have a higher moral obligation to release ourselves from those debts. It is a choice that we have to weigh carefully and conscientiously.

Bankruptcy is much easier to understand and be comfortable with if you know who the players are and what they do.

The Debtor: an individual or business who files the bankruptcy case. A debtor and spouse can file a joint petition in bankruptcy. The debtor’s most important job is to be honest and cooperative throughout the process, working closely with his or her attorney to present the appropriate paperwork and documents.