Process of Declaring Bankruptcy

The entire process of filing for bankruptcy can be quite overwhelming and complicated. However, a knowledgeable bankruptcy lawyer can direct you through all of the steps required to insure that when you get to court, everything goes smooth. The process is far more detailed than merely proving to the courtroom you can't pay your bills and with fresh federal bankruptcy law changes, it can be really burdensome to file without aid from an expert.

The first step in declaring bankruptcy is to make contact with an experienced attorney. They will initially figure out, based on the amount and type of your debt and current income, whether you are eligible for Chapter 7 or Chapter 13 bankruptcy. People who find themselves unemployed or have restricted income will probably be able to file Chapter 7, which means all unsecured debts can be wiped clean. When declaring bankruptcy under Chapter 7, some the secured debts may also be reduced, but it really does depend upon the kind of debt or collateral held.

You will then need to list all your assets, including any pending income such as lottery winnings or payments due from legal settlements. Your lawyer may also have you fill out a great deal of paperwork necessary to file to the court. Furthermore, classes on financial management and budgeting will also be required, both before and after you file, before the court will end the procedure, allowing you to begin with a clean financial slate.

People that don't get a Chapter 7 personal bankruptcy will likely have the choice to file for a Chapter 13 bankruptcy, allowing them to pay monthly installments to a court trustee to remove the debts during a period of a few years. Within a Chapter 13, you'll be allowed to keep all of your financial assets, even your secured finance, and lenders will have no choice but to just accept the terms established by the court trustee.

Whichever type of personal bankruptcy your lawyer determines is right for your financial condition will be filed with the court. On your court date, you'll be required to appear in front of the bankruptcy judge and, after answering a couple of questions and providing your legal professional has filed all of the required paperwork, you will have about 6 months before your individual bankruptcy is finalized.