When and how to file bankruptcy

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Introduction

Thousands of people file bankruptcy on any given day. As more struggle with chronic unemployment or lose their home to foreclosure, chances are personal bankruptcy filings will continue to increase. Before deciding to file bankruptcy, debtors should take the time to weigh the pros and cons of this life-altering event. Not only does bankruptcy cause harm to credit scores that can take years to overcome, but it also is costly to seek debt relief through the Federal Judiciary courts.

The following are some of the tips on how to file bankruptcy.

Look for other solutions first

jd874Make sure you are broke before you file for bankruptcy because it will reflect on your credit record for as long as ten years. If you know what your credit record and credit rating are, then you’re aware that it can hinder you from engaging in important financial transactions in the future, so make sure you think about this well. In some countries enforcing bankruptcy laws, they are requiring everyone who is intending to file for bankruptcy to go through a credit counseling session to know if there may be other alternatives available to the person.

Hire a lawyer

Most people opt not to find a lawyer when filing for bankruptcy, but you’ll soon learn that hiring bankruptcy lawyers is a good decision on your part since filing entails knowledge of finances and legal details that may be difficult for you to handle by yourself. Make sure you hire a lawyer that you can communicate with constantly because you need direct and constant supervision for your case. Most importantly, you need to look for a competent attorney who is knowledgeable of the bankruptcy law.

Go over your case with your attorney

This is an important part of filing for bankruptcy. So that your lawyer knows what strategy to use in filing your petition, go over your case with him in as much detail as possible. Report all your income streams and expenditures for the past six months so that he’ll know what to write on your bankruptcy forms. Calculate the costs. The fees for filing for bankruptcy may vary depending on where you live. Some lawyers charge a flat rate for filing, while others measure the fee by taking a percentage of the amount of your debt. If you’re lucky to find a lawyer that charges the former, then good for you.

Refer all your creditors to your lawyer

After you’ve settled your fees and you have the lawyer on retainer, refer all your creditors to him, and he will speak on your behalf. Once the petition has been filed, the “automatic stay” rule sets in, and no creditor can speak directly to you according to law. Creditors who violate this can be sought for damages on your part.

Wait for the creditors meeting

After filing the petition, you will be notified of the date of the creditors meeting, as prescribed by law. In this meeting, you will be asked to make a sworn statement about your petition, including your understanding that you are filing for bankruptcy.

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Wait for the lapse of 60 days for your complete discharge

Your creditors have 60 days from the creditors’ meeting to contest your discharge of all debts. After 60 days, then you are no longer legally liable to pay these debts.

Conclusion

Remember, your filing of bankruptcy goes onto your permanent credit record, so think about it very carefully before deciding to file, to save future financial transactions.