Essential Things You Should Know About Filing for Bankruptcy
Whereas the process of applying for some loan can be as simple as meeting the qualifications, situations may arise when you are not able to pay the loans back. One area of concern once you realize you are bot able to settle all the debts is the next step that is best for you. Most people and even businesses may never like the discussion about bankruptcy but now that it has already hit some people, you must know some key things about this big threat. One of the key things that you need to note is that bankruptcy is a legal process meaning that everything is decided in court and it involves both the lender and the debtor.
To begin with, you need to know how it all happens in court. The decision about bankruptcy is made in court and this is through a judge and an independent contractor who is hired for this service. The decision on whether you are eligible for bankruptcy is made after both the judge and the trustee have reviewed information to declare you bankrupt or not.
You will also get to learn that there are very many types of bankruptcy and you can view here to know more about it. Whereas chapter 7 is the most common type of bankruptcy, we also have others like chapter 11, chapter 12 and chapter 13. You should also know that chapter 12 is occupation-based occupation-based as explained on this page. Although chapter 7 bankruptcy may forgive most of the debts, you may have to sell some of the important bassets that you own to pay the debt.
Bankruptcy filing is both a long and expensive task. Remember you will have to meet the credit counselor for bankruptcy and debt as well as putting all the relevant information in place for the process. You should also be at the frontline to show the court that you have made the best effort you could in an attempt to fix the situation.
Normally, the court will come up with plans to have a look at your financial situation before any decisions are made. The key participants in looking at your financial statements are the lawyer, the trustee and the creditor. You should, however, have it that the process takes several days or even months and in some cases could go as long as 6 months. With the tips above, you will know all things that are important to you before you file for bankruptcy.
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