• Under U.S. Federal law, those who truly cannot pay their debts as agreed can petition for bankruptcy. However, bankruptcy laws changed in 2005, making it more difficult to pursue this type of legal debt relief. Individuals usually seek forgiveness of eligible debts through Chapter 7 or ask for a court restructuring of debt payments under Chapter 13, according to the book "How to File for Chapter 7 Bankruptcy."
  
  

Credit Counseling Requirement

• When the government enacted new bankruptcy laws in 2005, political leaders also mandated a credit counseling requirement. Simply put, you must complete a federally approved credit counseling program before your bankruptcy petition will be accepted. You also must enclose a copy of your completion certificate before the bankruptcy court clerk will even process your petition. In addition, the 90-minute credit counseling session cannot have been completed more than six months before you actually file bankruptcy, according to CNN.
  
  

Qualifying for Chapter 7

• The government intentionally made it harder for people to liquidate their consumer debts under Chapter 7 bankruptcy in 2005, according to CNN. A growing number of people were purportedly running up credit cards and personal loan accounts without ever intending to pay these obligations.
  
  A federal bankruptcy judge will evaluate your income and expenses to determine if you pass the "means test" to declare Chapter 7. If you can afford to pay 25 percent of your credit card bills and make more than your state's median income, chances are you will be forced to repay at least some of your debts through Chapter 13.
  
  

Debts Not Usually Eligible for Bankruptcy

• Some debts cannot be included in any type of bankruptcy, according to "How to File for Chapter 7 Bankruptcy." If you owe back child support or alimony and/or federally issued student loans, these obligations cannot be included in bankruptcy. Back taxes less than three years old also cannot be included in bankruptcy; this includes federal, state and local in most cases. Also, if you owe court fines or were successfully sued for damages related to drunken driving or another crime, you cannot include these types of debts in any bankruptcy proceeding.
  
  In the case of severe and permanent disability or a college's closure or negligence you may be able to have your federal student loan debt canceled. However, this is extraordinarily rare, according to "How to File for Chapter 7 Bankruptcy."