How an Individual Can File For Bankruptcy
When someone who is experiencing financial catastrophe files for bankruptcy under the Chapter 7 heading of the Bankruptcy Code, their goal is to repay some or all the debts in their name, in better terms, such as at a lower rate or at no interest at all. Using a bankruptcy attorney can be a very smart idea. Unlike Chapter 13, which involves liquidation of assets, this process entails restructuring debts so that the debtor can use whatever income they may have in the future to pay off the creditors. Filing bankruptcy is appropriate for a debtor who has a regular income and who can afford to make a request for these adjustments and reductions. Obtaining a Bankruptcy lawyer can help you figure out which is the best option.
Under the United States Bankruptcy Code, the debtor is allowed a period of five years during which the creditors must be paid back. An attorney is necessary to safeguard your interests, however the entire process is carried out under the supervision of the courts.
Under the agreement, debtors are allowed to keep all of their property and the court approves a new interest-free plan for repayment. A contract is created outlining the details of all the transactions that will occur, and how long it will take. The repayment must begin within a month to a month and a half after the case has started. In some cases, people may choose to involve a trustee who would take care of paying out the money to the creditors according to the agreement. Also, the creditors must strictly follow the repayment plan approved by the court and are forbidden to collect any claims from the debtor. An attorney will prepare the new repayment plan to best suit each individual situation. Another advantage of filing for certain types of bankruptcy is that a repayment can be created even if creditors disagree with it, as long as it is approved by the court, however the court allows creditors to file an objection to be fair.
There are some basic steps for how to file for bankruptcy. First, you have to determine if filing is in fact the best solution for you, so seeking the advice of an attorney is the wise thing to do. Next, you and the attorney can prepare a budget to figure out what your expenses are each month. Then, you will be ready to evaluate the best methods for dealing with your creditors. Now you are ready to complete the required forms, pay a filing fee and complete the process of filing the forms. Lastly, you will have to attend all the meetings required with creditors and appear at court hearings. Once you have made all of your payments, you must obtain a discharge paper so that the plan can be terminated.
Be aware that this is only a rough description of the bankruptcy process. You will definitely want an attorney you are comfortable with because there is a lot that lies between the lines and information that the average person may not fully understand. So, do not be afraid or ashamed to admit that you are experiencing a financial crisis because the sooner you begin, the better your situation will be.