If you're thinking of filing a bankruptcy claim, remember that it's not going to be easy for you, as creditors hardly bother about your condition, no matter how sincere you have been in your payments in the past.
To make things easier for you, here are certain steps.
Steps
o Consider all alternatives first and then go for filing bankruptcy claims as a last resort. This is a serious decision to take, as bankruptcy will stay in your credit record for up to 10 years. So, think twice before opting for it.
o Consider Chapter 7 and Chapter 13. The former is a liquidation or straight bankruptcy and the latter is a repayment plan for debtors. Remember that certain amendments have been made in both chapters recently. Things have become tougher now.
o Always hire a lawyer while filing bankruptcy claims. Never tread this path alone.
o Discuss thoroughly with your lawyer about your financial condition first and then go for bankruptcy. He can guide you to choose the right Chapter. He or she will also help you with the BAPCPA's means test.
o Check out the fees of the lawyers before starting with this. You can pay your lawyer as per the repayment plan under Chapter 13. But, under Chapter 7, your lawyer cannot be your creditor; hence, you may have to pay in full before filing.
o Once you file for bankruptcy claims, the "automatic stay" comes into effect and no creditor can harass you now. They will have to contact your lawyer.
o The next step is a short meeting with your creditors, where you will be sworn in to answer certain questions on record.
o Never use your credit cards to file for bankruptcy claims. Your creditor may get a chance to challenge your right to discharge the debt. In simple terms, it might create problems for you.
o In Chapter 7, it might happen that you are exempt from repaying your creditors. In Chapter 13, you may have to enter into a repayment plan for 3-5 years during which you need to repay your creditors off.
o In case of Chapter 7, it's the trustee who decides whether you have liquid assets through which you can pay your creditors. If you have assets that can be exempted, you can file a no-distribution will to the court. If you have non-exempt assets, the trustee will sell them and repay your creditors.
o After your meeting with the creditors, they are given 60 days to file a lawsuit against you. If no suit is filed, you receive a notice on the 60th day notifying the discharge of debt in case of Chapter 7. Discharge of debt means you are no longer obliged to repay your creditors.
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So, get yourself a good lawyer and then only go for this last resort of bankruptcy claims.
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