How to File Bankruptcy

So you’re looking at filing bankruptcy. Let me give you a few things that you need to consider during this very serious situation. Before you file for bankruptcy, I highly recommend that you look into speaking with a consumer credit counseling agency. There are two reasons for this. First of, you may not realized that bankruptcy perhaps is not the only option. Additionally, all of the items that you prepare in your budgeting process and in your listing of data that you will have to do with the consumer credit counseling agency is that something that you’ll have to do before you prepare to go to an attorney to file for bankruptcy. Now you need to realized that if the consumer credit counseling service is in agreement that you’re going to need to take bankruptcy because there is just no other option, then they will recommend a local attorney or might be several local attorneys that you can visit to prepare for this bankruptcy proceeding.

There are two different types of personal bankruptcies: you have Chapter 13 and you have chapter 7. Chapter 13 is used more frequently than in chapter 7, and roughly so. In chapter 13 bankruptcy, you will do a filing that simply protects you from the advance of your creditors. And it will actually sort of consolidate all of your creditors together so that you have a manageable monthly payment that you will make to the courts and they will take those payments and pay out the creditors. You’re not actually absolving any debt in a chapter 13 bankruptcy.

What you’re doing is you’re making a planned and manageable monthly payment to all of your creditors. Now, under a chapter 7 bankruptcy, you are absolving yourself of some debts. In the event of a chapter 7 bankruptcy, you will find that some of your creditors will decide that they do not want to be a part of your chapter 7 bankruptcies and you might have some unfriendly activities to take place that your lawyer will need to know about.

Now as for chapter 7 bankruptcy, this is a little bit more serious, I guess for lack of a better word than a chapter 13 bankruptcies. Under chapter 13, as we said, you are not absolving yourself of any debt. You are instead agreeing to pay all debt to all creditors just at a manageable time period. Under chapter 7, it’s not that way. You’re actually absolving yourself from some debts and then you’re choosing to pay other debts at a more manageable right.

During a chapter 7 bankruptcy, you will ask to, as I said, complete filings, all that include who you owe, how much you owe and the amount that you have been paying. You also have to add to this information what security you have for those loans, so that loans for instance for your home, or for necessary automobiles, or for other necessary items that you require to have for normal living purposes, or for business purposes, those will be included in your chapter 7 filing, in such a way that you’ll be able to retain those, and make payments for those, in a manageable way.

Other types of debts such as unsecured credit card debt, or personal loans, and in some cases medical bills, will be included in the filing in such a way that they will be absolve or written off and you will not be expected to make payment on those. It is very important for you to realize that under a chapter 7 bankruptcy, you only have an opportunity to make that type of filing one time every seven years. So it’s not to be taken lightly.

Also, your attorney wills advice you as to when is the appropriate time to take a chapter 7 bankruptcy. Oftentimes you might find it there are considerable amount of debts that are still incoming such as with medical expenses. And it would not be very wise to take a bankruptcy filing prior to the summation of all of those debts.