Bankruptcy is considered the last and final resort by people who can no longer manage their debt. in fact, there are times when your legal counsel will advice you that the best way to get out of the financial mess you are in is to make a bankruptcy claim. Once you have decided to file for bankruptcy, there are a few things that you will have to keep in mind in order for it to pan out well.
When you file a bankruptcy claim, you will have to find an experienced lawyer to help you do it. They will be able to advice you on the costs involved as well as the processes involved. You will also need to assess your situation and decide which chapter you plan to file for bankruptcy under. The most common ones are Chapters 7, 11 and 13. Chapter 7 is largely meant for individuals and it is the court's decision to make on the extent of the debt you are liable for and how you should go about it.
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Chapter 11 is for the businesses or larger corporations, however, individuals can still make use of this chapter. It will prevent some assets of yours, like you home from being sold in order to clear your debts. For a business, the onus will be on proving income versus debt. Based on this, the court will decide whether the defaulting individual or company can repay the debt or not.
Filing for bankruptcy under Chapter 13 means that you pledge a percentage of your pay cheque every month to clearing your debt. A court-appointed financier will build a repayment chart for you and it will have to be followed stringently. Missing out on a payment will simply mean that you will be liable for a penalty.
Once you have assessed your situation and determined the chapter under which you will file, you will need to make arrangements for bankruptcy fees. The cost involved in substantial, so do not be under the impression that it is an easy way to rid yourself of debt collectors. The fees involved are substantially higher if a court ruling does not go in your favor.
Once you have put together the fees for the bankruptcy claim, you will have to list out your assets and liabilities. As a business owner you will also need to provide all business related transaction details. With all this in hand, you will have to file your claim in court. Following this is an approximate 6 week waiting period till the court reviews you case and a decision is made.
It would be best if you conduct all your research prior to making your claim as this will give you better chances of a favorable decision.
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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