Bankruptcy sounds like a dirty word when things are going well. Anyone who is experiencing financial success or at least getting by shudders to think of having to go through it. However, for some people who have been suffering with debt for a long time, bankruptcy can be the key to freedom.

New Hampshire has seen more than its fair share of bankruptcies in recent years. Many residents and businesses in the Granite State suffered during the Great Recession a decade ago, and a record number of them had to declare bankruptcy. Although the trend has been reversing, a recent month saw an uptick in filings for bankruptcy protection in our state.

Chapter 7 bankruptcy is often a choice for people who are in serious debt and have no reasonable belief that they can negotiate reductions while retaining their remaining assets. It involves a liquidation of anything valuable in the person’s possession under the supervision of a trustee.

Chapter 11 bankruptcy is a reorganization of assets without liquidating all of them. This is often a better option for businesses that must remain solvent.

Chapter 12 is a less common type reserved for family farmers and fishing businesses hoping to avoid foreclosure or liquidation. This may apply to many businesses in New Hampshire.

People may file for bankruptcy on their own, but it is best when they have an attorney to assist with the filing process. A lawyer looking over the submission and helping to organize it may increase the chances of a successful filing and a quick recovery from financial problems.