Declaring Yourself Bankrupt – Where to Start?
We live in an age of easy credit. OK, the banks and financial institutions have caught a cold in recent years making obtaining credit harder to obtain, but for many people a worldwide recession combined with high personal borrowings and credit card debt, has resulted in real financial difficulty.
Credit cards have perhaps been the main reason for many people’s problems. Many have been seduced by the “live for today” attitude of the boom years, spending on credit cards with no thought as to how they were going to pay them off, only to find the interest payments almost impossible in the lean times.
Of course, one can buy some time by transferring some credit card debt to a card with a lower interest rate, but this does not solve the problem.
Declaring yourself bankrupt should only be considered when all other options have been examined in detail. The appeal of bankruptcy is the lure of starting one’s financial life again, with all debt taken away, a fresh start.
In addition, various companies have sprung up in recent months offering to handle your bankruptcy case for you, without fully explaining the consequences of personal bankruptcy. These should be treated with care.
If you decide bankruptcy is the way forward, then you should hire an experienced bankruptcy lawyer. They are not cheap, but they will explain everything fully and in detail, and take you through your options. This is one area of expense that should not be scrimped on – your financial future depends on it.
Before declaring yourself bankrupt, you need to check that you are, in fact eligible. There are 3 possible reasons for ineligibility.
If in the last 180 days you have, of your own accord, dismissed your own bankruptcy case you are ineligible.
If in the last 7 years you have been granted a bankruptcy discharge, you cannot file for bankruptcy.
If you have had a petition for bankruptcy discharged (you did not adhere to the bankruptcy code of practice) in the last 180 days you are ineligible.
Assuming you do not fall into any one of those criteria, you may proceed.
You need to file under one of the bankruptcy “chapters”. Your lawyer will advise which is appropriate for you and will probably choose either chapter 13 or Chapter 7.
There are advantages and disadvantages to both chapter 13 and chapter 7 bankruptcy. Chapter 7 is often the preferred chapter because although you have almost all your assets sold, any debt still outstanding is simply written off (with some exceptions), giving the petitioner a clean financial slate, whereas chapter 13 is a repayment plan over a 3 to 5 year period.
For additional interesting information about declaring yourself bankrupt, including information on angles to consider before filing and information on lawyers, visit www.declaringyourselfbankrupt.net. Visit the Uber Article Directory to get a totally unique version of this article for reprint.
File Bankruptcy Without a Lawyer – a Worthwhile Saving?
Many people are still reeling from the economic downturn and are wondering whether to file bankruptcy, and whether to file bankruptcy without a lawyer, seeing this as yet more expense.
I am the first to admit that lawyers can charge a small fortune, but with the complexities of bankruptcy law and the need to get it right, I would suggest that a lawyer is essential.
A lawyer will help guide you through the process and make sure you get the best deal possible.
Filing for bankruptcy will usually leave you debt free and asset poor, as in chapter 7 bankruptcy, or again leave you debt free, but after the completion of a repayment plan over 3-5 years.
Before determining what chapter one should file bankruptcy under, the BAPCPA bought in a compulsory means test in 2005, intended to weed out those who could afford to repay in full, and force them into a chapter 13 filing.
The means test is just one example of how important a lawyer’s guiding hand can be.
You need to find a mid-sized law firm so that you always deal direct with your lawyer, not a paralegal, common in large firms. This is because your relationship with your lawyer is of the utmost importance, and there should be a free flow of questions and answers between the two of you.
Also, try and find a lawyer who charges a flat fee, rather than an hourly rate. If you are filing under chapter 7, fees must be paid upfront as a lawyer cannot be your creditor. A chapter 13 case is different in that the fee can be paid through the repayment plan.
Another area where a lawyer is important is at the “341 Meeting” or “Meeting of Creditors”. This meeting is called just after filing for bankruptcy.
You will need to provide the meeting with documented statements regarding amounts owed and to whom, as well as your own financial details.
At the Meeting of Creditors, you are asked questions under oath, your financial details inspected and which chapter you should file under. It’s complicated and a lawyer should be with you to advise.
A lawyer is also able to give you sundry advice on less obvious things. For example you should not use a credit card for anything at all once bankruptcy is filed, as you are effectively spending money you know you cannot repay.
A lawyer is a very important component in the bankruptcy process.
This is onlyone aspect of declaring yourself bankrupt. For further free information on different aspects of bankruptcy, visit www.decalringyourselfbankrupt.org. Don’t reprint this exact article. Instead, reprint a free unique content version of this same article.