How To File Bankruptcy

When you have financial problems that are overwhelming, you are under stress to resolve them. Sometimes the financial problem is too bad until you declare bankruptcy. Bankruptcy is something that can cause a lot of stress, ruin relationships, leave you feeling helpless, and something that will never leave your head.

Filing bankruptcy means that you are legally insolvent. When you file for bankruptcy, you are taking a legal action. This action has to be approved by the court. If you decide to file for bankruptcy, it is best to get the advice of an attorney who specializes in bankruptcy. The attorney will ask for detailed information regarding your income and assets.

When you decide to file bankruptcy, you have a couple of different options. Chapter 7 bankruptcy is what most people think of when they hear talk of bankruptcy. With some exceptions, such as your primary residence and vehicle, your assets are liquidated to pay off your creditors and then your debts are discharged. For the next ten years, your bankruptcy will remain on your credit report, but many people are still able to start building up their credit again when they can start with a clean slate.

The other option is Chapter 13 bankruptcy. Chapter 13 is much like a debt consolidation. You, as the debtor are given five years in which to repay your debts. Your attorney may act as a trustee or a debt counselor and accept one monthly payment while he distributes them on your behalf. During this bankruptcy, your creditors are not permitted to contact you to ask for repayment.

Deciding whether or not to file for bankruptcy should not be taken lightly. There is a price to pay. This is a big finance commitment that will affect your whole life and should only be done after careful thought and consideration.

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