How Do I File For Bankruptcy

2007-03-08 10:33:40

( Financial )



Sometimes, regardless of how responsible we are with handling our money, there are instances when we falter. This is inevitable, especially if we have too many things to worry about everyday. Perhaps, the question in your mind right now is: How do I file for bankruptcy?

Filing for bankruptcy is not the end of the world. It should comfort you to know that there are ways for you to emerge from this experience with the least number of battle scars possible.

How Do I File For Bankruptcy?: The Legal Side

First, consider filing ONLY if you have no other option. Remember, a bankruptcy filing will taint your record for around ten years. According to the law, you should first consult with a credit counseling agency, so that you are sure that all your alternatives have been exhausted.

There are two types of bankruptcies. The chapter 7 bankruptcy, which involves a liquidation of your assets, and the chapter 13 bankruptcy, where you work with a repayment system. It's easier to apply for a chapter 13, because the so-called means test in chapter 7 is a complicated and demanding phase.

Consider hiring a lawyer to assist you. Some people choose to be lawyer-less, but this can be very tedious, with the financial and legal jargon. Getting a lawyer entails an extra cost, but it's worth the expense because it reduces the hassle.

How Do I File For Bankruptcy?: The Price

As regards the cost of filing, it depends on the legal services you acquire or on the value of your debt. On the average, bankruptcy filings cost $1700, and may be paid in installments or through collateral arrangements. If you're lucky, some filing agencies allow to you file for free.

After you have submitted your file, your creditors will meet to assess your situation. A verification of all your details will follow, wherein you will be asked to swear in a recorded meeting. This usually lasts 10 minutes and should not be a problem if you have been truthful. To avoid further hassle, provide honest details at the onset.

The 60 days that follow the meeting of creditors will allow anybody who would like to contest to post their objections. If nobody does, then your debt will be discharged shortly after, if you filed a chapter 7, that is. If you had opted a chapter 13, you will receive a discharge order around a month or two after you have completed your payments and your trustee gives a go signal.

The process above is fairly easy and should be relatively painless. Keep in mind, though, that though you now know how to file for bankruptcy, it does not always relieve you of your debt 100%. However, the good thing about debt is that it is temporary, and that it can be paid off eventually.

Thus, if you find yourself up to your neck in debt, do not fear. There is life after a bankruptcy filing and you should expect to be more wary and responsible with handling your money after.


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