Deciding whether or not to file bankruptcy can be difficult, especially if you’ve always been responsible with your payments. You need to understand that bankruptcy laws were made for your own protection. Credit card or any type of loan lenders could care less about how hard you may be having it. Even if you’ve been responsible and loyal in the past, they really don’t care if some misfortune comes your way. If you’d like to know how to file bankruptcy, this guide will help you.
• Only consider filing for bankruptcy if you have no other alternative. Bankruptcy will stay on your credit report for many years. Of course, if you are thinking about filing, your credit is most likely already ruined. Bankruptcy will give you a new start. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) dictates that anyone wanting to file bankruptcy must receive some counseling for their credit within 180 days of the filing date. The credit counseling company must be one that the US Trustee approves of.
• You’ll have two types of bankruptcy to consider, the most common being Chapter 7. Chapter 7 is straight bankruptcy and there is sometimes liquidation involved. Chapter 7 can be difficult for some people, and they may have to file Chapter 13. Chapter 13 involves repayment plans, and the repayment plans are set so that the consumer can afford to pay each month.
• There is a lot of research involved with filing bankruptcy. Although some people choose to file on their own without a lawyer’s help, it’s in your best interest to hire a lawyer. If you decide to go through a firm, make sure that you can directly deal with the lawyer and not a paralegal. Meet with your lawyer and have him or her go over the case with you. Make sure he or she answers all of your questions.
• Find out how much it will cost you to hire a lawyer. The fees vary from lawyer to lawyer. Some lawyers will require you to pay them up front, while others will allow you to pay in installments.
• Make sure that your creditors are informed of your bankruptcy plans. Refer them all to your lawyer. An “automatic stay” will then go into effect, and creditors will no longer be allowed to contact you about your debts. If they still try to do so, they can be held liable. You, your lawyer, and creditors will have a meeting that will cover all of your options. You must make a list of all your assets.
• If you’re filing for Chapter 7, the trustee must decide whether your assets can be liquidated or not. If so, they will be used to pay your creditors back.
• Your creditors will have 60 days after the meeting to decide whether they’ll challenge the discharge. A discharge, of course, means that you’re no longer obligated to repay the debt. Keep in mind that not all debts can be discharged if you file bankruptcy. Student loans and child support usually aren’t included with bankruptcy.
So now you know how to file bankruptcy and have an idea of what it entails. You should still continue doing research, though. Find out all of your options before making any decisions.
10 Dec
