During difficult economic times, individuals may struggle to make regular payments on important bills and control their debts.
Other factors like divorce, the death of a spouse, or unemployment may make it even more difficult for people to keep their finances in order.
If a person is unable to repay their debts and feels that his or her financial situation is out of control, he or she may decide to file for bankruptcy.
Bankruptcy proceedings can be executed in several different ways, depending on the individuals specific circumstances.
Once an individual files for bankruptcy, a plan for repayment or forgiveness of debts will be outlined and the path to recovery will be established.
In some cases, people who choose to file for bankruptcy may see their possessions put up for auction to ensure repayment of important debts.
A bankruptcy auction allows creditors to receive payment through the sale of the debtor's assets.
While this may not be the most attractive option for many people, individuals in serious debt may not have a choice.
If debts are serious and the person has no options for repayment of his or her lines of credit, valuable assets like homes, property, and personal possessions may be auctioned off to repay debts.
Typically, a court-appointed trustee will be placed in charge of the liquidation of a debtor's assets, and he or she will be in charge of the bankruptcy auction.
Once the trustee is placed in control of the assets, the debtor relinquishes control of the property and cannot control where it goes or for what price it will be sold.
Typically, the bankruptcy trustee will attempt to get "fair market value" for the assets and will make sure that the creditors receive the payment that they requested.