Filing for bankruptcy is a tough decision. It is a decision that one should take only after careful consideration of all options. A bankruptcy stays on your credit record for ten long years; therefore, it is best that you go for bankruptcy only after you have tried all other options and they have failed to resolve your debt situation.
What To Do Next
Once you have decided that you are going to file for bankruptcy, the next question that you need to ask yourself is - which chapter? If you are filing for personal bankruptcy, you have two options available in front of you - Chapter 7 and 13.
Under Chapter 7 bankruptcy, your non-exempt assets would be liquidated to payoff your creditors. If you file for Chapter 7 bankruptcy, you can get a discharge within four to six months.
Chapter 13 bankruptcy allows you to negotiate with your creditors so that you can adjust some of your debts under a repayment plan. Under the repayment plan you are given three to five years to repay your debts.
After changes introduced by the new bankruptcy law in 2005, you cannot just go to a bankruptcy court and file for a bankruptcy chapter of your choice. The new law has introduced certain criteria in order for you to file for a particular bankruptcy chapter. For example, if you want to file under Chapter 7, your monthly income should be below your state’s average income.
Filing for bankruptcy is definitely not an easy thing. There are many questions and issues that you need to resolve before you can file for bankruptcy. For example, if you have just moved to a new state, can you file for Chapter 7 in that state? What are the assets that you can keep and which ones would be liquidated in the event of filing for bankruptcy?
Need For A Bankruptcy Attorney
Can I get exemption from credit counselling requirement? There are many other such questions that you need to find answers to before you file for bankruptcy. And that is why it is recommended that you consult a lawyer. In other words, once you have decided that you are going to file for bankruptcy, you need to consult a bankruptcy lawyer to help you figure out which Chapter is right for you. Your lawyer will show you the right direction. Furthermore, a bankruptcy lawyer will help you get all your paperwork together so that everything goes smoothly.
So how do you find a good bankruptcy lawyer? You can ask your friends or family to recommend you one. You can go online and search for a bankruptcy lawyer. Make a list of several bankruptcy lawyers and set up a free consultation meeting with them. Have all your questions ready when you go for the consultation.
A good bankruptcy lawyer will answer all your questions to your satisfaction. You should also look for experience and qualifications while searching for a bankruptcy lawyer.
You might ask why you cannot file for bankruptcy without the help of a lawyer. The fact is that you can, but do you have all the knowledge about bankruptcy laws to argue your case in the court. Remember that you are seeking a fresh start and if you do anything wrong it could lead to your bankruptcy case being dismissed. A bankruptcy lawyer will cost you but in the long run it will be worth it.
Once you have hired a lawyer to file for bankruptcy, you should refer all your creditors to your lawyer. From now on they should be speaking to your attorney and not you. Once you have filed for bankruptcy, there would be an automatic stay on the collection efforts of your creditors.
The bankruptcy would be filed in the bankruptcy court in your district. Most debtors usually do not have to attend their court hearings. However, it is important to attend the creditors’ meeting.
Once you have attained a bankruptcy discharge, you can begin anew with finances.