Whether you are an individual or an organization, if you know that the debts you owe are far more than the means and assets available to you and you may not be able to pay the debts, one of the last options that you have is to file for a bankruptcy petition. However, it is not recommended to consider filing bankruptcy as an easy option to get rid of the burdensome debts. You should keep in mind that bankruptcy usually has far reaching financially negative impacts and it may eventually make the financial path a hard cake for you. You may have to struggle hard to put your finances back on track with substantially damaged credit ratings. In most cases, it will keep your financial life highly disturbed for the next ten years at least. This way, we can say that bankruptcy is an option to go for when no other alternative options are feasible for you.
Again, while you are filing bankruptcy, it is very important for you to have a clear understanding regarding the procedure in order to ensure its least negative impacts on your financial life.
Eligibility Criteria To File For Bankruptcy
The bankruptcy laws have set strict eligibility criteria for filing bankruptcy. It is not just that you can file for bankruptcy just because you want to do that. You will have to meet certain standards. The purpose behind the strict bankruptcy laws is just to keep a check on various bankruptcy frauds.
Hiring A Bankruptcy Attorney
Since bankruptcy laws vary from state to state and because of the complexity of their nature, the first thing that you have to do is to hire a right bankruptcy attorney to help with the filing bankruptcy procedure. Only an efficient and expert bankruptcy lawyer will be able to make the best use of the options available to you under the boundaries drawn by the bankruptcy laws.
Choosing The Type Of Bankruptcy You Want To File
Let your bankruptcy lawyers decide for you the best type of bankruptcy you should file for. There are two types of bankruptcy – liquidation (chapter 7) and reorganization bankruptcy (Chapter 11, 12 or 13).
Take Every Record
After you have hired a bankruptcy attorney for filing bankruptcy, you will have to provide him or her with the facts associated with the various kinds of debts you owe and the assets and means available to you. Be very honest with your bankruptcy lawyer and do not try to conceal or manipulate facts. Always remember that a teacher, a doctor and a lawyer are some of the people whom you should never lie to. Therefore, be very prudent in gathering the facts and make sure that you have not missed any important information.
The more bankruptcy information your lawyers will have, the better they can handle the case and defend your bankruptcy claim.