How to File Bankruptcy

Bankruptcy, it’s an option that a person have to discharge the debt that they can’t pay anymore. Of course bankruptcy should be the last, last resort, last option after trying several things. Because this is something that’s going to hit really hard on your credit report. It’s going to be a public record that’s will stay there for ten years. So you really need to be sure that bankruptcy is the last thing available for you to get rid of the debt that you owe, to discharge the debt. Okay? So first thing, if you are feeling overwhelmed and cross your mind that you want probably to file bankruptcy, first thing that you need to do is to seek some help. Probably meeting with credit counselor to analyze your options, analyze your financial situation.

And then discuss your option will be great help, because probably there’s something else that can be done. Work with your creditors, work a payment plan, have some settlement done, before you go on file for bankruptcy. So, first thing, just get some help from, some credit advice, form credit agency, credit counseling agency. Discuss your options, what also can be done. If bankruptcy seems to be your last option and only option to get rid of that debt, then it’s going to be good for you have some legal advise because bankruptcy is something that you need to do through the court. You actually need to file your papers in court, in the bankruptcy court. So it’s good for you to have some legal advice just to make sure that your papers are correct, that everything is presented and your case is not going to be dismissed.

Another thing why it’s good for you to have legal advice and the counseling session, it’s for you to know about the process of the bankruptcy. Since October 2005, the bankruptcy law changed. And now not everybody can apply for any kind of bankruptcy.

Basically there are two types of personal bankruptcy: the one that is called the chapter 7 and the one that is called the chapter 13. The chapter 7 it’s the one that is also called the straight bankruptcy, where you include the debt and you can discharge 100% of what you are including in there. Discharge basically means that you are not going to be legally responsible to pay for that debt once it was discharge by the court. But for this chapter 7, you need to qualify by income, and usually it’s through the means test that an attorney or paralegal service can do for you. If you don’t qualify for 7, then they see if you qualify for a chapter 13. But a chapter 13 works out a repayment plan that’s usually is work through the court.

The court will review your papers and will assign you with the payment plan that will last in between 3 to 5 years. And it’s when you are paid, when you paid off this repayment plan set by the court, that they will discharge the remaining amount of your debt. So, this is the second bankruptcy, and it’s also good for you to know according to your situation if you finally have decided to file for bankruptcy, what type of bankruptcy will be suitable for you.