When facing overwhelming debt, filing for bankruptcy may be the best option for some individuals. It’s an official legal process that can help you eliminate or repay your debts and get back on your feet financially. However, the process can be confusing, and many people may not understand the steps they need to take to file for bankruptcy properly. This post will discuss how to file for bankruptcy and explain the different types of bankruptcy available.
Identify Your Type of Bankruptcy
The first step to filing for bankruptcy is choosing the type that best suits your unique financial situation. There are two primary types of consumer bankruptcy. Chapter 7 is also known as “liquidation bankruptcy” as it requires the sale of your non-exempt assets to pay off your creditors, after which the remaining amount of your debt will be eliminated. Chapter 13 is also known as “reorganization bankruptcy”. This type of bankruptcy allows you to keep your assets while you work with the court to repay a portion of your debts in 3-5 years.
Hire a Bankruptcy Attorney
While it’s not mandatory to have an attorney when filing for bankruptcy, it’s strongly advised to do so. A bankruptcy attorney can guide you through the legal process, help you complete the required paperwork, and protect your legal rights. You can find a qualified bankruptcy attorney, like those at Jason Weiner and Associates PC, from the internet, friends, and family, or from your local bar association.
Gather Financial Information
After you have decided the type of bankruptcy that best suits you, the next step is to gather your financial information. You will need to collect information on all your debts and assets, including your income, expenses, and debts. This information is used to complete the official bankruptcy form, which is filed with the court at the time of your bankruptcy petition.
File Bankruptcy Petition
Once you have collected all the necessary information, you are now ready to file your bankruptcy petition. Filing your petition initiates your bankruptcy case, and it requires the submission of your bankruptcy form, a filing fee, and additional required documentation. The petition will also trigger an automatic stay, which will halt any lawsuits, collections, or foreclosure proceedings against you in most cases.
Complete Credit Counselling and Financial Management
Lastly, before your debts can be discharged, you must complete two mandatory courses that are administered by an approved credit counseling agency. These courses will help you understand how to manage your finances in the future and ensure that you have exhausted all other options before filing for bankruptcy.
Filing for bankruptcy can be a difficult and emotional process, but it’s essential to put yourself back on the right track financially. Understanding the steps involved, choosing the right type of bankruptcy, hiring a bankruptcy attorney, collecting necessary information, filing the petition, and completing credit counseling are all steps that can help you go through the process smoothly. Remember, filing for bankruptcy always comes with consequences, such as a significant impact on your credit score, so it’s reasonable to consider your options carefully. Working with a seasoned bankruptcy attorney can help you make the right decision and guide you through the process with ease.
About the author:
Lizzie Weakley is a freelance writer from Columbus, Ohio. In her free time, she enjoys the outdoors and walks in the park with her husky, Snowball.