Steps To File For Bankruptcy
Ensure that you have looked at all other options and alternatives. Bankruptcy will remain on your credit for up to 7 years. A recent law was passed on October 17th, 2005 which requires individuals to obtain consumer credit counseling from an entity approved by the U.S. Trustee within 180 days of the date of filing. This counseling is required to make sure no other alternative options can be used.
There are two main bankruptcy types to consider. The two types are a Chapter 7 (which is a liquidation bankruptcy), and a Chapter 13 (which is a repayment plan). The Bankruptcy Abuse Prevention and Consumer Protection Act has made it much more difficult to file a chapter 7 because of the means test. This test goes over the means you have to pay debt and if there is any chance at all that you could pay some towards debt they will force you to file a chapter 13.
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Always use a lawyer to file for either type of bankruptcy as they will take care of most of the research for you. Try and find a lawyer firm where you can be in direct contact with your lawyer to ensure clarity and good decision making.
When you meet with your lawyer make sure your lawyer is asking and answering all of your questions as they will determine which chapter is going to be best for your situation. A lawyer is also an awesome resource that will assist you with completing the BAPCPA's means test.
Make sure you go over how much this will cost as each lawyer charges different hourly amounts. Some lawyers charge a straight fee while some charge by the hour. The average fee is $1,700 dollars but can vary significantly depending on the state you live in.
Once you have retained a lawyer refer all your creditors to your lawyers office. This is the greatest perk of having a lawyer is that by having one you can stop the endless annoying calls. Once you have notified your creditors that you have a laywer they will then be liable if they continue to harrass you with phone calls.
A meeting will be scheduled with your creditors which is called a 341 meeting. This meeting allows the trustee to ensure you have given truthful testimony on your BK petition and that you understand the terms.
All assets and debt will be calculated and ensured that all assets and debt are included in the bankruptcy proceedings.
Do not use your credit cards if you know you will be filing for bankruptcy. A creditor can challenge the discharge of debt owed.
If you file a Chapter 7 bankruptcy, the trustee will determine if any assets can be liquidated and used to repay your creditors. In a Chapter 7 BK you may never have to pay a creditor back, but in a chapter 13 you will be required to enter into a 3 to 5 year repayment plan in which you will pay your creditors as much as you can in that time frame.
A bankruptcy discharge typically happens after 60 days from the 341 meeting. If no creditors have filed lawsuits or challenged your discharge a discharge of your debts will be given. A discharge means that you have no further obligation to repay the debt that you owed. If you file a Chapter 13 you will get a discharge 30-60 days after your last payment.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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