How to Claim Bankruptcy

If you are one of thousands of people around the country that are in desperate need of financial repair, then it’s important for you to pay close attention to the information presented in this article. Recent economic events have created a host of new financial challenges for people that were once solid contributors to society. Although it seems that these people have done nothing to deserve their current financial crisis, they need to find a quick way out. Fortunately, there are procedures that can work to get creditors off your back and to get you on the road (once again) to financial prosperity. The information laid out in the following article pertains to how to claim bankruptcy and will provide you with some basic information related to initiating the process and what to expect once things get underway.

Before we begin, it’s important to note the importance of seeking legal representation if you think you might be qualified to claim bankruptcy. A legal professional can examine your finances and determine the correct course of action. Assuming you move forward with the bankruptcy process, a qualified bankruptcy attorney can also help you decide which form of bankruptcy is right for you. Although you’re likely to pay a decent amount of money for a reputable attorney, doing so is often much better than going through the process alone, particularly if you have not outside knowledge of how things work and what to expect.

Whether you decide to secure an attorney or not, the first thing you will be asked to do is to provide an extensive history of your finances, which will later be viewed by the bankruptcy court. You will need to compile a list of all your assets and debts, and you will also be asked to provide your total household income figure. It’s critical that you provide the proper information the first time around, since the information you submit will be used to determine the type of bankruptcy protection that you will qualify for. The information pertaining to your non-exempt assets will also be provided to your creditors, whom will use it to seek repayment for debts that you may owe. This process (and the associated form that goes along with it) is called the proof of claim process.

Once you’ve provided the courts with your financial information, you will then need to determine the type of bankruptcy that’s most applicable to your situation. The two most common types are Chapter 7 and Chapter 13. It’s important to note that one is not necessarily better then the other; rather, one is better suited to people with assets that they wish to protect (Chapter 13). The most “popular” form of bankruptcy protection is Chapter 7 bankruptcy, which provides the debtor with minimal assets to eliminate a certain portion of their debt through the process. Any “non-exempt” assets that the debtor holds will be used to pay back their creditors through Chapter 7 Bankruptcy.

On the other hand, if you have assets that you wish to protect, then the better option is likely Chapter 13, which is often termed “reorganization bankruptcy.” The reason why is because it essentially calls for the development of a repayment plan over a period of 3-5 years, during which the debtor can hold onto valuable assets like land and real estate. It’s important to note that this form of bankruptcy protection will only be an option for people that have a predictable income in order to meet the payment amounts that are agreed upon.

In addition to the fees that will be required to secure legal representation, you will also need to pay court fees and filing fees. Because these fees can add up quickly, it’s important to determine whether or not the amount will affect your decision regarding whether or not to file. On the other hand, the courts may throw out your case if they determine that you make enough to pay back your debts using conventional or alternative methods. In general, you should expect to pay about $300 to file for Chapter 7 bankruptcy and between $1,000 and $2,000 to secure a bankruptcy attorney.

The last step in the process will be to file a petition with the bankruptcy court. Once a petition has been filed, you will be notified in about 6 weeks as to whether or not your application was accepted.

The following video offers some advice about how to avoid filing.