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EASY STEPS TO FILE FOR
BANKRUPTCY
You have huge debts and
feel that your finances are crumbling.
There are several ways to get out of it
and the last one to choose is
“Bankruptcy”. But, before you consider
this option, it is better to make sure
that all your other options are
exhausted. The reason for this is: if
you file for bankruptcy then your credit
report is scared for the next seven
years. But, the brighter side of this
process is that you get some financial
space to breadth. You can use this space
to jump right back in to action provided
you don’t make the repeat mistakes.
If you have exhausted all
your resources and filing for bankruptcy
is your only option now, then you need
to know the options that are available
to you now. Bankruptcy is divided in to
two types. The first one is “Chapter 7”
also referred to as Liquidation
Bankruptcy and the second one is
“Chapter 13”, also known as “Scheduled
Repayment Plan”. But, filing for
bankruptcy under chapter 7 has become
very hard because you have to pass the
means test. This test finds all the
resources you have to determine whether
you are eligible or not to apply for
bankruptcy under this chapter. If they
find that you have some means of
repaying any part of the debt they you
will be forced to file for bankruptcy
under chapter 13.
It is a wise option for
you to hire a lawyer. Do some research
and go for a reputed law firm, where you
can contact your lawyer directly. He
should have knowledge in these matters
and should also be willing to help you.
Arrange a meeting with him and brief him
about your situation. Then, show him all
the necessary documents and the aspects
of filing. This will help you to choose
the right chapter.
Inform your lawyer if
your creditors continue to harass you
and your family. Your creditors will be
forced to hold a meeting with your
lawyer and it is called “341 Meeting”.
This will ensure that you will not
receive any more harassment calls from
your creditors and to make your
creditors understand the terms and
conditions of your bankruptcy. Your debt
and your assets are calculated for the
bankruptcy proceedings. If you file for
bankruptcy under Chapter 7 then all your
assets are liquidated by the court and
the funds got is used to repay your
debt. But, if you file for bankruptcy
under Chapter 13, then you negotiate a
repayment plan which may vary from 3 to
5 years during which time you will repay
your creditors. You will not have to
repay your actual debt as during the
negotiation your creditors would have
reduced your debt. You get discharged
after sixty days after meeting with your
creditors called the “341 meeting”,
which means that you are not obliged to
pay for your debt, anymore.
The effect of bankruptcy
on your credit report is terrible. It
will shave off 200 points from your
report. |
