Bankruptcy, and whether or not to file, may be one of the most difficult decisions you will ever make. Some circumstances make it inevitable, however. A job loss, unexpected medical expenses that overwhelm you, or other factors that make it literally impossible for you to pay your debts can, and do occur. It’s important to research the bankruptcy information available before you make this choice.
First and foremost will be the amount of debt you owe and whether you are able to repay this debt. Next, the lawyer will advise you as to what “chapter” bankruptcy you are eligible to file. This will normally be a Chapter 7 or 13 for most individuals, and debts will be classified as “secured” or “unsecured”. Secured debt means that someone holds a lien on your collateral, and unsecured is a debt that has no collateral lien, such as a credit card.
You do need a lawyer to guide you through the whole process even though some people choose to go it alone and do their own filing. Bankruptcy law is very complicated and it is extremely important to be familiar with restrictions, requirements and other necessary factors. Bankruptcy lawyers specialize in this field and are the best people to assist you.
Gather all your financial information before visiting a lawyer. Be prepared in advance to honestly answer any questions the attorney may have pertaining to your credit history and ability to pay your bills. Not disclosing information may result in your bankruptcy petition being refused, and you may be guilty of fraud. As difficult as the questions may seem, they are the lawyers way of determining if you are eligible.
In a matter of five to six months your chapter 7 bankruptcy will be discharged if approved. You will receive notice in the mail of the decision. Chapter 13 bankruptcies will have a trustee appointed to oversee the payments you are scheduled to make, and this person will take and distribute money to your creditors each month.
If unforeseen circumstances have put you in the position of contemplating bankruptcy, the more bankruptcy information you have, the better equipped you will be to make an informed decision about this and the impact on your financial future. Some people look at bankruptcy as a new start and a clean slate, and are much more careful about their finances in the future.
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