How to Apply for Bankruptcy Protection
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It is never an easy decision to apply for bankruptcy. Even when you are neck deep in debt and are considering throwing in the towel, there are factors to consider before filing for bankruptcy. Although legally you are entitled to file for bankruptcy, the process is far from straightforward.[br]
Apply for Bankruptcy: Factors to Consider
Your first step would be to validate your bankruptcy filing. Here, you need to submit your financial records, such as income, assets and liabilities, to the judge and your creditors. If the debt size is large, your creditors are unlikely to accept any minimal repayment plan, and the settlement costs more often than not spiral out of control.
You will also need to forfeit the credit cards that have outstanding balances. Securing any type of loan becomes virtually impossible. Your credit rating takes a nosedive and you are not entitled to any credit cards and loans for at least 10 years after the bankruptcy ruling.
The process of bankruptcy is a costly affair. The various costs incurred include attorney fees, filing fees and court fees, among other things. On a positive note, you will be free of your creditors’ calls and visits, and all foreclosure actions will cease.
Apply for Bankruptcy: Steps Involved
Although applying for bankruptcy could be stressful, being informed about the process takes the edge off your stress and hurdles.
After meeting with your bankruptcy lawyer, your attorney will file your case in the court. Your creditors will be also informed about this, and a meeting is scheduled among all the parties involved in the process. Most creditor legal action will be halted as soon as you file.
Soon, you will receive a notification from the court, outlining the meeting details with your creditors. This is called a 341 meeting and it is mandatory for you to attend it. Failure to attend the meeting would result in the dismissal of your case.[br]
The meeting usually revolves around the court appointed trustee verifying your paperwork and determining, whether you are eligible for bankruptcy or not. In a Chapter 7 bankruptcy case, the trustee locates you assets and discharges them to your creditors in order to pay off your debts. Under Chapter 13 bankruptcy, the trustee oversees the payback plan arrangements and distributes payments.
When you apply for bankruptcy, you get a second chance in life to erase your financial burden and make a fresh start. Therefore, use the process wisely, read the fine print and show extreme caution and integrity when dealing with every individual involved in the process.