Several thousands of Americans file personal bankruptcy even when they have better options available to them. A bankruptcy can stay with you for your life. Bankruptcy lawyers and counselors tell you that bankruptcy gives honest debtors a fresh start. Keep in mind, the fresh start is a costly restart of your financial life. Avoid it if you can. If it is inevitable, you need to know your rights, limitations, and future possibilities.Chapter 7 and Chapter 13 are the two personal bankruptcy choices available to individuals. Chapter 7 is about liquidation of assets. It gives immediate relief of debts. The trustee liquidates the assets and repays the creditors. The property for which the debtor has a right is not liquidated. There is little or no nonexempt property under Chapter 7 bankruptcy cases.Another option is Chapter 13 bankruptcy. There is no immediate discharge of debts in this type of bankruptcy. This is filed by persons who have a regular income. The debtor promises to repay the debts over three to five years. The debtor can keep his or her properties. In both cases, the creditors are not allowed to initiate any action against the debtor. Although no immediate discharges are available, this plan covers more debts than Chapter 7 personal bankruptcy does. At the end of the three to five year repayment plan period, the remaining unsecured debts are discharged.The payments are made through the trustee. However, creditors can challenge the bankruptcy filing at court.Before Filing Personal BankruptcyThere are several provisions in effect prevent abuse of bankruptcy laws. People planning to file bankruptcy suits must first get credit counseling. Only government approved organizations can offer such counseling.The pre-bankruptcy counseling involves appraisal of individual financial situation, exploration of alternatives to bankruptcy, and preparation of a practical personal budget plan. The organization is legally required to provide free counseling, if the individual can’t pay for the services. The fee is around $50. You will also receive a certificate of completion of counseling.There is also a debtor education session, which lasts for about two hours. Your bankruptcy plea won’t be accepted unless you furnish the certificates.About The Credit CounselorCertificates from government approved counselors are needed for filing personal bankruptcy suits. You must take into consideration the kind of services on offer. The services, fees, fee-waiver, if needed, the qualifications of the counselors, etc. are important matters to discuss. Do your research on the counselors before you sign up for their services.A credit counselor can also tell you if personal bankruptcy is the best choice you have. If bankruptcy is inevitable, they can also tell you whether to go for Chapter 7 or Chapter 13.Except in minority of cases, bankruptcies are due to the sloppy behavior of individuals. If you plan to make a fresh start with a personal bankruptcy, make sure your personal finance decisions are always wise.