When you file for bankruptcy, there is an essential piece of information that you need to disclose. Based on the information, the court will be able to decide which chapter you can file. The information includes your list of creditors and the amount owed to each. After the process of filing is complete, you and your attorney must have a meeting with your creditors. This is known as the 341 meeting. It is normally a forum in which your creditors will be notified of your financial bankruptcy and arrangements made on how the bills will be settled. If you file under chapter 7, your assets should be sold off and the proceeds distributed among your creditors. This is where debt consolidation comes in.  Debt consolidation during bankruptcy is a concept that can help you a great deal in paying much less money to your creditors. It works by bringing all your debts together and calculating a favorable percentage that will work for the benefit of all creditors. What follows is that you have to look for a debt consolidation firm that will act as your representative in the whole transaction. In this case, all your debts are treated as one. This is to say that the trustee who will sell off your assets will only require writing a single check. This is what he or she will send to the consolidation firm, which will then distribute the amount thereof to all your creditors in proportion to the calculated percentage. All you need to do is pay the firm a small fee for the services.