Your attorney can evaluate your financial situation and recommend the best course of action. Chapter 13 may be recommended if your household income is sufficient to make payments. The trustee then establishes a plan for you to repay your delinquent debts over a specified period of time. This plan may include payments for mortgage defaults, delinquent credit cards, medical expenses, loan deficiencies, and in some cases, delinquent taxes. In order to file for this form of bankruptcy, you must have sufficient income to pay your current bills and the payment plan amount. If this is not feasible, Chapter 13 is likely not a viable option.
In this situation, the bankruptcy attorney may recommend filing under Chapter 7. This allows you to eliminate all of your debts with the exception of alimony, child support, and state and federal obligations. In order to qualify for this form of filing, a number of requirements must be met. The criteria will consider your income, if any, as well as your assets and liabilities. Your wealth will be determined. If you have an excessive amount of assets, your trustee may sell or liquidate them. The proceeds are then distributed to creditors. However, you are permitted to retain only a limited quantity of assets. In addition to your personal possessions such as clothing, furniture, and bedding, you are permitted a certain amount of property and cash.
After establishing your intent to file for bankruptcy, you must complete a credit-counseling course over the phone, online, or in person. Once this is complete, your attorney can continue. Following the filing of paperwork, a meeting of creditors will be convened. You must be present at this meeting. Your creditors might or might not show up. Frequently, they will not materialize. You will be joined by the trustee. The trustee will ask you questions to ensure that you comprehend the specifics of your actions and their potential impact on your future credit. Additionally, he may inquire about the origin of your debt. Be truthful and briefly explain how you arrived at this juncture. He is not judging you; he is merely ensuring that you did not build up bills with the intention of discarding them.
After this encounter, you will be required to complete an additional course on financial management and education. You will then present your certificate to your legal consular upon completion. You will soon be released from the ordeal and on your way to a new beginning.""
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