HOW FILING BANKRUPTCY WORKS

CHAPTER 7 BANKRUPTCY

The bankruptcy law is complex and can be difficult to navigate. An individual, with their bankruptcy attorney, requests that the bankruptcy court agree that he/she cannot pay all the debt that is owed. The bankruptcy court is advised of the specific bills that are owed and of the property the individual hopes to keep.
The paperwork submitted to the court is called a "Petition." Skill must be used in planning and preparing the petition to enable the debtor to eliminate the most debt while retaining the most property. Mistakes at this stage can cause significant harm to the person submitting the "Petition." If not correctly completed this paperwork can be rejected by the court and property will be needlessly lost. It is also critical to plan the correct time to file the "Petition" to avoid rules preventing abusive bankruptcies. Properly categorizing debts and evaluating assets is extremely important. In a Chapter 7 bankruptcy case, you will file several forms with the bankruptcy court disclosing your personal and real property, your income and expenses, debts and property transactions. The Bankruptcy Court will appoint a person called a "Trustee", who is assigned to oversee your case. About 30 days after you file bankruptcy, you will have to go to the "Meeting of Creditors" where the bankruptcy trustee reviews your case, verifies your identity, and may have a few basic questions. Despite the name, creditors rarely attend. The meeting lasts only a few minutes. A couple of months later, you should receive a notice from the court that "all debts that qualified for discharge were discharged."

CHAPTER 13 BANKRUPTCY

When filing Chapter 13 bankruptcy, the bankruptcy attorney is responsibility to represent the debtor who has a regular income from which to pay the creditors in compliance with the court ordered repayment plan. Also known as a wage earner bankruptcy, most debtors choose to file Chapter 13, rather than liquidate their assets through a Chapter 7 bankruptcy. Chapter 13 allows an individual to negotiate a payment plan that gradually allows them to catch up on outstanding debts over a 3 to 5 year period. The Chapter 13 bankruptcy attorney will consult with the debtor to help them retain all exempt assets, which should not be liquidated in addition to helping with the process of the bankruptcy filing. The bankruptcy attorney can help stop foreclosure, garnishments and repossessions. A bankruptcy attorney is a key player in a successful Chapter 13 bankruptcy, helping the debtor keep their personal property and real estate.

Why go it alone? If you wanted to fly an airplane would you just buy a book and a pile of parts? When doing something serious common sense tells you to have guidance from someone who knows what they are doing.
A bankruptcy attorney will properly use the bankruptcy laws to your maximum advantage and help you make correct choices. Professional and knowledgeable representation is the key.

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Before filing for bankruptcy it’s important to learn about the process and the consequences of a bankruptcy filing. There is a great amount of information available on the Internet. The best way to learn about filing bankruptcy is to get a free consultation with a local bankruptcy attorney. This will give you a chance to explain your personal situation and see if filing bankruptcy will work for you. There are many things to think about when considering personal bankruptcy. It definitely is not a decision to be taken lightly, so it’s best to be as educated as possible before making this important decision.