There are a few key questions that every consumer wants to ask regarding bankruptcy. Some basic facts need to be understood to get a good understanding before filing for bankruptcy.
Bankruptcy is defined as the process by which a court allows a consumer to make a brand new start. This is done by debt elimination or the court provides the consumer with a chance to reorganize debt obligations under a payment plan convenient to him/her. There are several options available for filing bankruptcy and each option has its own rules and regulations.
A person can file for bankruptcy using one of the do-it-yourself methods but it requires a lot of knowledge on how to handle the related issues. It is usually much better to hire a lawyer expert in bankruptcy practices. The lawyer can provide great insight and information on how you should be proceeding further.
The first thing you need to do is to gather up all of your debts. Then you should have a consultation with an attorney. He will advise you further on what chapter to file.
You will be responsible to make all the required payments. You have to pay the attorney fees, the court filing fees and any other payments that will have to be made according to the specific chapter you are filing for.
The attorney will make a bankruptcy petition for you and file it with the court. He will be alongside you during all the proceedings. The attorney can also make a call to all the collectors on your behalf and make sure that all the collections and other actions cease during the time the filing is in process. Once the petition has been filed on your behalf, you will proceed according to the chapter you have chosen. If you have filed for Chapter 7 bankruptcy, you will be required to attend a meeting consisting of all your creditors. If you have filed for Chapter 13 bankruptcy, you should be anticipating a number of appearances in court over time. A judge will decide your case under the terms your petition is accepted.
There are several bankruptcy options available. The most commonly used options are the Chapter 7, Chapter 11 and Chapter 13 options. However, other bankruptcy options are also used like the Chapter 9 and Chapter 12.
Your credit rating will be negatively affected if you have filed for Chapter 7 or Chapter 13. There will be a ten year listing on your report in case of Chapter 7 and a seven year listing on your report in case of Chapter 13.
There are several key differences between the two. When you are filing for Chapter 7 bankruptcy, you can eliminate most of your debt. When filing for Chapter 13, your debt is not fully eliminated but reduced to a minimum amount.
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- Understanding the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
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- When to Claim Bankruptcy
