Filling for bankruptcy can help you get out of a tight financial situation. However, the status remains on your credit report for up to ten years and may affect other areas of your finances. Of course, several things go into consideration when pondering bankruptcy. The complexity and ambiguity of bankruptcy agreements might leave you needing answers to various questions:
- Is filling for bankruptcy worth it?
- When should one consider filing for bankruptcy?
- What are the benefits of bankruptcy?
- What are the concerns?
Find experienced attorneys
It is recommendable to hire a professional, experienced attorney who can represent and guide you throughout the process. Some situations might benefit from filing for bankruptcy. For instance, if you are struggling with debt repayment, do not have any assets to be repossessed, or have no income to meet your debt requirement, bankruptcy can help you get rid of some dischargeable debts.
However, you need an evident-rich petition that will leave the court with no other decision than to declare you bankrupt. This requires the services of an experienced bankruptcy attorney. They will help you navigate the confusing world of debt agreements and contracts. They also ensure you are protected by law from any harassment antics debt collectors employ.
Document preparation
As the attorney compiles your petition, they will request various kinds of documents related to your finances and situation. This may include:
- Tax returns for the last two years
- Evidence of income (pay stubs) for the previous six months
- Valuation or appraisal of any valuable property you own (like real estate)
- Exact calculations of the total debt amount you owe to creditors
- Bank statements
- Stock accounts and investments
- Pensions and retirement plans
Several other documents may be required to help build your petition. The attorney should provide adequate resources and assistance on how you can get this documentation ready. In most cases, your unique situation will determine the documentation your attorney requests.
Petition preparation
Once all the documents are in order, your attorney will proceed to build a bankruptcy petition depending on your unique situations. There are four main types of bankruptcy petitions available: Chapter 7, Chapter 11, Chapter 12, and Chapter 13. The appeal will include a comprehensive outline of your financial situation, including listings of your assets, current income, disposable income, liabilities, and budget situation, among others.
Today, attorneys who file bankruptcy petitions are required to do so online via PACER (public access to court electronic records). Following the first petition, you will receive a notice to commence the case. A statement is also released to all creditors to stop them from suing or pursuing the debtor. There are several other things involved, including the infamous 341a meeting of creditors, objection complaints and issuance of discharge order, among others.
Conclusion
Filing for bankruptcy requires sound decision and accurate information. There are many myths about bankruptcy and how they affect your credit score and financial abilities moving forward. An experienced attorney can help you better understand how different aspects and laws affect your situation. Make sure you have pondered all the other alternatives before you file for bankruptcy.
