Filing for Bankruptcy

If you are facing overwhelming debts, you may conclude that you should file for bankruptcy. Since this is a serious step, it is worthwhile to sign up for credit counseling first.

Can I File For Bankruptcy?

In fact, bankruptcy rules require that all debtors complete credit counseling at an approved agency prior to filing for bankruptcy. This step allows the would-be applicant to carefully consider their other options first.

Assessing Personal Bankruptcy Eligibility

If you then still believe filing for bankruptcy is the best course for you, you will probably want to review the types of personal bankruptcy. Those debtors with few or no assets and a less than average income for your state will probably be required to file for Chapter 7 bankruptcy. If you have valuable assets you want to keep and an income sufficient for your expenses plus additional money available to put toward debts, you may be required to apply for Chapter 13 bankruptcy. You will want to investigate the requirements for each type carefully together with a legal counsel.

Attorney Specialized In Bankruptcy

It is advisable that you find a lawyer to help you review the requirements for filing for bankruptcy and determine the type that is best for you. Retaining an attorney is especially important if you plan to file for Chapter 13 bankruptcy. In this case, the attorney will not only review your eligibility but also help you draw up the required repayment plan. Look for an attorney who will work directly with you rather than delegating a deputy. They are more often found in smaller law firms. Make sure the lawyer answers all your questions. A lawyer who charges a flat fee rather than a percentage of debt is to your benefit.

How Do I File For Bankruptcy?

First, you will need to obtain the official governmental forms for your selected type of bankruptcy. These can be downloaded from the Internet. After completing the forms, you must submit them with a statement of income and expenses, a statement of assets and debts, copies of still effective leases, a financial statement and a copy of your most recent tax return to the clerk of the court in the area where you reside. You also must pay the required fees which vary according to type of bankruptcy. If you are filing for Chapter 13 bankruptcy, you will need to submit your repayment plan within the following two weeks.

The Role of The Bankruptcy Trustee

A creditors meeting with the trustee appointed to your case and your creditors will be held within a specific time period following your filing for bankruptcy. You and your spouse will be required to attend that meeting and respond to questions under oath. Approval of the petition filed and the repayment plan, if required, stops all creditors demands for repayment in any form.

The trustee appointed to your Chapter 7 bankruptcy case will decide if there are assets which can be liquidated to pay your creditors. In a Chapter 13 bankruptcy case, the trustee will oversee your payments for secured assets over a three to five year period according to your plan. The court will authorize your discharge of all debts covered by the repayment plan only after the plan has been followed through.

Bankruptcy Discharge

Discharge is the termination of a bankruptcy filing. It means you no longer owe or will be asked to pay the covered debts. They have been eliminated or repaid.

Some unsecured debts, such as taxes, student loans, domestic support, may remain outstanding. In most cases, there are alternative avenues to pursue in satisfying them. Other unsecured debts such as credit card debt and medical bills, will be eliminated with discharge.

While filing for bankruptcy will remain on your credit report for seven to ten years, your former overwhelming debts will have been eliminated and thereby allow you to proceed with your life on an easier path.

Bankruptcy Attorney

You now know that bankruptcy is divided into different chapters. If you wish to file as an individual (personal bankruptcy) you can do so under chapter 7 or chapter 13 as a business (reorganization bankruptcy) you file under chapter 13.

A bankruptcy attorney will be able to answer all of your questions and concerns and at the same time be able to guide you through all of the steps involved with filing. In many instances, a bankruptcy attorney may practice in only one, while others could be involved in many types of bankruptcies/chapters. Click here to find a bankruptcy attorney.