Some Helpful Information Concerning Bankruptcy
Bankruptcy is hard to imagine, especially if you consider yourself hard-working and responsible. But, this law also protects you. Here are things you should expect from bankruptcy, and how to go through it as painless as possible.
Steps
1. Bankruptcy allows for a fresh start. Under BAPCPA (Bankruptcy Abuse Prevention and Consumer Prevention Act) 180 days before filing a bankruptcy you should obtain some consumer credit counselling to see if you have any other alternatives.
2. Take time to review the two common bankruptcy types - Chapter 7 (liquidation bankruptcy) is the most popular, and Chapter 13 (repayment plan). Individuals usually file a Chapter 13 because it is more manageable and assets are not lost. 3. Hire a lawyer. When you do a research related to filing bankruptcy, it will help you decide to consult a lawyer. 4. Go over your "case" with your chosen lawyer. He should be asking questions that would help you determine which type of bankruptcy to file, based on your financial affairs. 5. Once your lawyer has filed your case, "automatic stay" will take effect, which means NO creditors should be calling you and sending letters about your debt. 6. Once your petition has been submitted, wait for the creditors meeting. You will be sent a mail regarding the schedule. This meeting will ensure that you are honest with your bankruptcy petition and you agree and understand the terms for filing bankruptcy. List all your assets and review your file with your lawyer. Your answers in the meeting will be recorded. 7. Do not use your credit card when filing for bankruptcy. The creditor will take that against you, challenging the discharge of debt owed. You may not be able to discharge the debt if the creditor brings it up to adversary proceedings. TIPS Research. Make yourself proactive and well-informed. It is a fact that even rich people file for bankruptcy! These are smart people who used this system to their benefit, you should too. Include all debts that can be discharged. Always remember that student loans and tax bills are debts that can not be discharged. However, bankruptcy filing can help you organize your other debts. After you have filed the "automatic stay", creditors can not call you or collect the debt. If they do so, notify your lawyer. Bankruptcy stays on your credit report for up to 10 years. However, you can still re-establish credit. There are companies who are willing to help people with bad credit records. Your landlord and your employer will not be informed about your bankruptcy, but since this is a public record, whoever is eager to know will find out. Back-up all bankruptcy filing records for at least a year. Have a good rapport with your lawyer so you will be comfortable discussing bankruptcy issues with him. Warning! Most credit repair companies are bogus; you might end up with more debts. Remember that you can only file chapter 7 once every eight years. Chapter 13 can be filed at any time. So discuss thoroughly with your lawyer which is the best type for you.
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