things to know when filing bankruptcy

Things You Need to Know When Filing for Bankruptcy

Filing for bankruptcy is often seen as a scary proposition. As an individual or a business owner, you might never have imagined things taking that route but life is never short of surprises. The focus should be on getting back on your feet. It is important that you’re familiar with the process of filing for bankruptcy even if you’ll be working with an experienced attorney. Having a deeper understanding is crucial so that you’re aware of the steps to take.

There Are Two Main Options

When filing for bankruptcy, you’ll be faced with two main options. You will have to consult with the attorney in order to determine the one that is best for you.

Chapter 7 bankruptcy: Also referred to as liquidation bankruptcy, this option will mostly discharge all your unsecured debts. Such debt will include credit cards and personal loans.

Chapter 13 bankruptcy: With this type of bankruptcy, you’re required to come up with a repayment plan so that the creditors are paid over a period of time. There will generally be no liquidation of the property with this process but it could take up to five years before everything is finalized.

Bankruptcy Will Open You Up to Financial Scrutiny

If you’ve never gone through a bankruptcy case before, one might assume that it is a normal process and the court system is the same. It should be noted that such cases could last for longer than 90 days and entail complicated legal matters. That is why it is important to have a bankruptcy attorney by your side for the best possible outcome of the case. When you file for bankruptcy, it will be mandatory that you attend the meeting of creditors. During such a meeting, you will be asked many of questions in a public setting and under oath. There are no restrictions on the questions and any creditor that is present is allowed to probe. You should expect your finances to be scrutinized.

Complete Disclosure Is Required

It is crucial that you’re completely honest and transparent when filing for bankruptcy. Leaving out important details could be detrimental to your case. You’ll be required to provide a list of all your properties, creditors, and debt. When dishonesty is discovered, you could be looking at losing your discharge, or worse.

Having looked at some of the most important elements when declaring bankruptcy, you might be wondering what is required in order to begin the process. There are some key steps that you should take and we’re going to highlight some of them.

Find an Attorney

This will be the first thing you’ll need to do if you’ve decided to file for bankruptcy. There is a lot of information on the internet about finding the right lawyer. Ideally, you should be looking for someone that is experienced with bankruptcy law and has handled a case similar to yours in the past. To get the right attorney, you can ask for references from your family lawyer or accountant that you’ve worked with.

Credit Counseling

It is a requirement by the Federal Bankruptcy Code that individuals get credit within 180 days before declaring bankruptcy. For married couples, both individuals will be required to attend credit counseling sessions. You’re not supposed to go to just any other counselor. There is a list of approved counselors by the U.S. Department of Justice.

Complete The Paperwork

This is the most time-consuming part of the whole process of filing for bankruptcy. Your attorney will need to prepare a petition. In addition to that, you’ll be required to provide detailed documentation of your assets, income, living expenses, and tax returns.

Meeting With Trustee

The court will appoint a trustee for your case once you file for bankruptcy. The role of the trustee is to oversee the case up to its logical conclusion. The trustee’s work is to look for assets to liquidate to pay your creditors with.  However, most assets are protected with bankruptcy exemptions.  For the process to be smooth, it is imperative that you’re cooperative with the trustee. You must furnish them will all the financial documents that they request.

Additional Considerations

There could be additional requirements for a married couple. You have the option of filing for bankruptcy together or separately. If you’re on good terms, it is recommended that you’re filing together to avoid filing fees. It might seem like a good idea for one spouse to file for bankruptcy so that their credit score isn’t being affected. It will be imperative to speak with an experienced bankruptcy attorney to determine if it makes sense to file bankruptcy together.

Conclusion

The process of filing for bankruptcy is complex and time-consuming. Once you’ve decided it is the best option for your situation, you’ll need to familiarize yourself with the process. There are potential pitfalls that can easily be avoided with the right information. It is also important that you’re working with an experienced attorney for your case. Take your time to do research. Look at all the available options before making any important decisions.

Butcher Law Office, LLC.

Butcher Law Office, LLC was founded on the premise of offering personal and one-on-one bankruptcy services for clients. You get to work with Tom Butcher who is an attorney with more than 12 years of experience and more than 1300 bankruptcy cases filed.

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