Bankruptcy Is The Last Option

The first of the several steps in filing bankruptcy is to make sure that bankruptcy is the only available option left to you. Before you go ahead and file for bankruptcy, make sure that there are no other alternatives left and bankruptcy is the last available option. It is important for you to understand the negative impacts of bankruptcy on your future financial life. Credit score is one of the most important aspects of today’s financial life and if you are granted bankruptcy, it will badly damage your credit record and you may have to work hard for the next one decade to rebuild your credit and get things back to normal. This is also important because as per the bankruptcy laws, you are supposed to obtain some consumer credit counseling form before filing bankruptcy.

Research Your Options

If you are knowledgeable enough, you may like to go ahead and defend the case yourself. However, it is not an easy thing to do for a common person keeping in view the intricacies involved in the bankruptcy laws. Therefore, if you are not sure that you will be able to defend bankruptcy successfully, you had better hire a bankruptcy attorney. They will certainly charge you substantial fee but it is worth paying the fee if you want to defend your successfully. Therefore, the second step in filing bankruptcy is probably to hire an efficient and experienced bankruptcy lawyer.

Type Of Bankruptcy

As per the bankruptcy laws, there are different types of bankruptcies that you can claim for depending upon your specific case. Therefore, the next step is to choose the right type of bankruptcy you have to file. Your bankruptcy attorney will help you in this regard. They know the ins and outs of the bankruptcy laws including the new ones that have been added recently and they know which type of bankruptcy is the best for your specific situation. Here, you have to be very careful because if at a later stage you want to convert the bankruptcy type, you will have to fill a conversion file and this will require you to pay a certain fee, which is substantial in nature.

How Much Will filing Bankruptcy Cost You

The next step in filing bankruptcy is to figure out the overall filing bankruptcy cost. This may include filing fee, your attorney fee, conversions fee and various other fees – both expected and unexpected. You will have to assess all types of expenses.

The next step in filing bankruptcy is probably to have a meeting with the creditors under the guidance of your bankruptcy lawyer in an effort to reach some common terms out of the court. If things do not work, you may go ahead for the proceedings in the bankruptcy court.

Filing Bankruptcy Is A Legal Process

When it comes to filing bankruptcy process, the first thing that is very important for you to understand is that filing bankruptcy is a legal process. Therefore, every decision you take in this regard must be well informed. You must have the idea of the consequences that your improper bankruptcy actions may bring for you. For example, if you are filing bankruptcy under chapter 7 bankruptcy code, but at a later stage, you come to know that chapter 13 bankruptcy is the right option that you should go for, you will have to fill out a conversion form. You will also require paying certain amount to the bankruptcy court as conversion fee.

Type Of Bankruptcy You Should File For

When it is about filing bankruptcy process, the first thing that you need to decide is the type of bankruptcy you should file. Therefore, it is important for you to be aware of the various bankruptcy chapters. For example, there are four main bankruptcy laws under four different chapters of the bankruptcy code. You need to have the basic understanding of all these chapters in order to save yourself from the hassle that you may have to face if you are trying to change the bankruptcy type in the bankruptcy forms at a later stage.

Meeting The Various Parties

After you filled the bankruptcy forms and submitted the same to the bankruptcy court, the next big thing in the filing bankruptcy process is to have a meeting with the various parties involved in your bankruptcy case under the guidance of your bankruptcy attorney. It is better to have the meeting with your creditors in the presence of the bankruptcy attorney hired by you and the lawyers hired by your creditors.

Overall, the better you understand the filing bankruptcy process, the smoother your bankruptcy proceedings will run. Therefore, you had better be well informed.

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.

Assess Your Per-Month Expenses

Before you proceed for filing bankruptcy, the first and most important thing that you need to do is to assess all your per-month expenses. You need to do this in a proper manner covering all the small and big expenses; therefore, it is better if you start by making an extensive list for the same. Your mortgage or other rental payments must get the priority in this regard, following the car payment and other such expenses. Here, you should note that you do not have to include the amount of loans and credit card dues. You just have to add all those expenses that you cannot live without.

Assess The Available Means And Assets

Now, the next big thing after filing bankruptcy that you have to do is to assess the available means and assets that you have. You need to assess, if there will be some money left after making payments for all the necessary monthly expenses. Your objective is to calculate if the remaining money is sufficient to pay off the regular installments of the various loans and credit card. If there is a deficit, you should calculate the amount of the deficit.

Talking With The Creditors

If you find that you will have enough money left with you to pay off all the loan installments, your problem is solved then and there. All you have to do is, be organized and manage your finances wisely. However, if the money left is not sufficient to pay off the loans, you should first try to talk with your creditors and ask them to extend the loan tenure or reduce the amount of interest. In usual circumstances, if your case is genuine, the creditors do not mind extending the loan tenure and decreasing the amount of monthly installments.

Filing bankruptcy is a situation you should think of, when you do not have funds to support even your day-to-day expenses.

The Introduction Of The New Laws

Especially, since the time the new laws have come into effect, things have become much more difficult. Earlier, people had the liberty to choose the type of bankruptcy they wanted to file for. It was optional for them to file their cases under chapter 7 or chapter 13. However, the new bankruptcy law has now introduced some restrictions regarding this. Now, it is mandatory for everybody filing for bankruptcy to go through a means test and a government approved credit-counseling service. It is only if you fail the means test and even the credit counseling is not much of a help for you, you can file under chapter 7 for a straight bankruptcy.

Laws Vary From State To State

It is also important for you to understand that the different states have their own set of laws. Especially, the exceptions of various assets and properties have been defined differently in each state. Some states have been very liberal towards the debtor while some other states have been favorable to the creditors. Therefore, in order to make the best use of the laws in your favor, you need a bankruptcy lawyer who is an expert in this field and knows the intricacies involved in the process. This is where an online bankruptcy lawyer may come to your rescue.

The Importance Of An Expert Legal Professional

As we can see that there are lots of complications involved in handling a bankruptcy case. Therefore, you just cannot ignore the importance of an expert legal professional. A bankruptcy lawyer is an expert person who is aware of all the ins and outs of the concerning laws. However, it is important for you to make sure that the bankruptcy lawyer you are hiring has a license to handle bankruptcy cases in your state. What is more, he or she should also be aware of the new law changes that have been introduced a few years back. In particular, you have to be more careful in choosing a business bankruptcy lawyer. Business cases are usually more complicated and the lawyer must have expertise in handling the same.