It doesn’t really matter how it happened, an unexpected illness, a job loss, poor financial choices, whatever the situation is that got you to the point where you have got no way out except to file for bankruptcy, it’s important to know various aspects of what bankruptcies are, and aren’t. Consider this article your personal bankruptcy for dummies guide. I’ll give you some ideas of what you can expect and what you will need to do.
Basically, when you file for bankruptcy you are saying that you just don’t have enough money or assets to repay your creditors. Once you’ve filed for bankruptcy creditors cannot legally call or contact you in any way. For many people that one aspect will provide a very nice break.
There are two types of bankruptcies that are used by individuals: Chapter 7 and Chapter 13, your attorney will tell you which option is best for you. Chapter 7 allows you to wipe your debts away without having to repay them, but depending on your state, you may lose your home. Chapter 13 is when you agree to repay your debts over a period of 3 – 5 years. In this case you may be able to keep your home.
If you opt for a Chapter 13, make sure you are realistic in the amount you can pay monthly toward your debt. If you default on your repayment agreement, the courts may step in and order the immediate liquidation of all of your assets.
Many of the laws can differ significantly from one state to another so you will want to hire a local attorney to represent you and walk you through the process. When you are looking for a lawyer don’t make the mistake of hiring the first one you see in the yellow pages. Lawyers are like any other profession: some are better than others. Even if a lawyer is qualified that doesn’t mean that you like them or will feel comfortable working with them.
When you are trying to find a good bankruptcy lawyer, don’t wait until the last minute. You should allow yourself enough time to meet with several attorneys so you can find one that you feel like you can work with. Many lawyers will have free consultations so this process doesn’t have to cost any more money.
When you do hire a lawyer make sure that you have all the paperwork you need so they can get an accurate picture of your financial situation. That is the only way they can give you good advice. If your lawyer doesn’t tell you specifically what documents to bring, ask them.
For the most part you will need to provide your lawyer with all documents related to any loans you have, secured or unsecured. You will also need to provide them with information on medical and credit card bills as well as any savings, checking, or other financial accounts.
A bankruptcy will disrupt your financial situation for up to ten years, that’s why it’s so important to only file for bankruptcy as a last resort and to make sure you are fully informed about all aspects of your case. Use this personal bankruptcy for dummies article as a starting point in this process.