Motives for Declaring Bankruptcy
Numerous individuals file for bankruptcy as a last resort due to medical expenses, credit card debt, unemployment, divorce, or ineligibility for the aforementioned programs. There are two main types of personal bankruptcy that can be filed: Chapter 7 bankruptcy, which involves the liquidation of assets to pay off debts, and Chapter 13 bankruptcy, which involves a 3 to 5 year repayment plan to creditors.
In reality, declaring bankruptcy should be your last resort, if for no other reason than the severe and long-lasting effects it will have on your credit for the next seven to ten years. Regardless of how dire your current financial situation may appear, there are typically superior options you should consider.
Procedure for Declaring Bankruptcy
Before filing for bankruptcy, a consultation with a bankruptcy attorney is required. The subsequent stages include obtaining a copy of the debtor's credit report, gathering the debtor's most recent tax returns, gathering the debtor's deeds, titles, and loan documents, etc. After analyzing all of these documents, the attorney will discuss the alternatives and next actions. Next, a petition will be filed with the courts, along with a statement of assets and liabilities, and a list of creditors will be appended. The filing charge for Chapter 7 is approximately $200, while the filing fee for Chapter 13 is approximately $185.
Once all of the paperwork has been processed, the courts will issue a stay prohibiting creditors from contacting the debtor and preventing creditors from seizing the debtor's property. Approximately one month after all of this is completed, a meeting in the form of a court date is scheduled with the attorneys for both parties and the debtor present; an agreement is reached at this time. The bankruptcy will be discharged once everything has been finalized and agreed upon. A bankruptcy can remain on an individual's credit report for up to ten years.
Conclusion
Do not endeavor to accomplish this alone. The bankruptcy procedure is extremely complex, and state laws vary widely. People who have filed in the past have stated that if they had to do it again, they would absolutely hire an attorney, as doing so saved them significantly more than the legal fees.
The decision to apply for bankruptcy should be made carefully and only after all other options have been exhausted. Filing for bankruptcy can make it difficult to acquire a vehicle, furnishings, and other items. Any significant purchase can be impacted by a bankruptcy.""
" - https://www.affordablecebu.com/
