How To File Bankruptcy

If your finances are in desperate need of repair then you’ve likely considered the option of filing bankruptcy. Although the personal bankruptcy process isn’t the only way to break free from an endless cycle of debt, it can be particularly helpful for those that have exhausted traditional means for financial repair. Of course, simply stating that the bankruptcy process is useful doesn’t necessarily provide you with any help. After all, you are here to learn about the specifics of filing a claim and you want to know how to file bankruptcy in the most efficient way possible. Fortunately, we have all of the information you need in order to get your life back on track through claiming bankruptcy.

The first step in understanding the bankruptcy process is to know that filing a bankruptcy claim comes with a certain set of consequences. Far too often people assume that filing a claim is a simple process that will quickly yield them a positive financial outlook. While filing bankruptcy can certainly be liberating in terms of its ability to wipe out accumulated debt, all individuals should understand the associated consequences, which are summarized below –

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Consequences Of Bankruptcy

• Damaged Credit Rating – A Bankruptcy Will Remain On Your Record For Up To 10 Years
• Filing Bankruptcy Can Cost You Several Hundred Dollars
• Filing A Bankruptcy Claim Can Be Time Consuming
• Filing A Bankruptcy Claim Can Be Embarrassing

We stress the consequences because far too many people overlook them in an attempt at quick and easy financial repair. Now that you know a bit more about some of the negative aspects of filing for bankruptcy, it’s time to dig into the specifics of getting your claim submitted and approved.

How To Claim Bankruptcy – A Step By Step Guide

The first step in preparing your claim is to decide whether to file bankruptcy yourself or to seek assistance through a bankruptcy service company or attorney. Although there aren’t any laws that prohibit you from filing bankruptcy on your own, there are several advantages to seeking qualified representation. Choosing an attorney is a great way to ensure that you receive up to date legal advice, and an attorney can also represent you in court. Costs for an attorney range from $1,000 to $2,000 per individual case, and while it’s possible to hire a cheap bankruptcy lawyer, you should exercise extreme caution when working with discount lawyers. Apart from hiring a lawyer, you might also decide to seek assistance through a bankruptcy service company. These companies provide help with document preparation, which is seen by many as the single most time-consuming part of the filing process.

Once you’ve decided on how to file bankruptcy, you need to understand the different types of bankruptcy. The two types of personal bankruptcy are known as Chapter 7 and Chapter 13. Perhaps the most popular option is Chapter 7, which is also known as “straight bankruptcy.” Individuals choose this option when they aren’t worried about protecting valuable assets or when they don’t have the financial means to reorganize under Chapter 13. Under Chapter 7 bankruptcy, an individual’s assets are liquidated to help pay back their creditors. Any debt that is not taken care of through the liquidation process is forgiven through court proceedings. Chapter 13 is quite a bit different than Chapter 7 as it’s designed to allow an individual to retain their assets. Often referred to as “reorganization bankruptcy,” Chapter 13 essentially creates a repayment program that allows the individual to pay back their debt through structured terms.

After choosing the most appropriate type of bankruptcy protection, you will need to collect detailed information pertaining to your debts, assets and household income. This information will be used to determine your eligibility for bankruptcy. The US Bankruptcy Court has set forth strict guidelines that serve to prevent people from scamming the system. It’s extremely important that you are as honest as possible when collecting information regarding your finances, as the information you provide will determine whether or not your claim is processed.

Once you’ve filled out the necessary forms, you will need to pay a filing fee of about $200. The contents of your application will be reviewed and the bankruptcy court will determine your eligibility. If your application is accepted then you will be granted almost immediate relief from harassing creditors. By law, creditors are not allowed to contact you once your claim has been processed and approved. You will also be required to appear in court before your creditors to discuss repayment procedures.

For more information on how to go bankrupt responsibly, please feel free to browse our comprehensive site. We also have information on how you can obtain a free bankruptcy evaluation.

Click on the following link for the answer to the question – “How Can I File Bankruptcy On My Own?”