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The Ins & Outs Of Declaring Bankrupcy – What You Need To Know

The Ins & Outs Of Declaring BankrupcyPeople suffering from serious financial problems and debt often feel like they have nowhere to turn and no viable solutions. While it is a difficult situation, a consumer has multiple options to fix the problem and get out of debt. An effective solution to overbearing debt is to file for bankruptcy. One should not take this lightly as it will cause problems in the future when a consumer wants to borrow money. However, for many, it is the only way out of the problem. With this in mind, here is a quick guide on the ins and outs of filing for bankruptcy.

Determine: Now, some people will not want to file for bankruptcy as it is a serious and time-consuming manner. To understand if it is right, one must sit down and run the numbers. To do this, an individual should use a piece of paper or an Excel document and note all of his or her debts, income and monthly expenses. In some cases, a person will notice that he or she will only need to make minor adjustments to pay off the loans. Other times, a consumer will see that he or she will not have any other option but to file. With this in mind, one can proceed without fear or guilt.

Chapter 7 or 13: When filing for bankruptcy, one has a couple of choices. For example, a person with a high amount of debt and no assets will want to file for Chapter 13. On the other hand, an individual with substantial liquid assets will need to file for Chapter 7. In fact, when in court, one will have to state their case and justify why they filed for Chapter 13.

Law firm: The process is both intimidating and difficult for a layperson to navigate. Without a bankruptcy attorney, most people will commit serious errors; this will delay the process severely. For this reason, it is wise to spend some money to hire a qualified bankruptcy attorney. With a lawyer, a client will have a hand throughout the entire process and will not make any small or large mistakes. While a legal professional will make things easier on a client, it is wise to take time to search around and ask a lot of questions. With this step, one can begin the process and get out of debt quickly.

Sit down with the attorney:
When signing up for the services of a legal professional, a client will be on his or her way to freedom. Now, a client can sit down with the lawyer and offer his or her financial picture. With this information, the lawyer can assess the situation and determine the best course of action.

File: Once a person determines what they want, and he or she verifies with the lawyer, it is time to fill out the paperwork and head to court. This is not a time-consuming process. When going to court, a client will not have to speak much and, as long as the person filing followed all the proper procedures, he or she should leave the court within a couple of hours.

When filing for bankruptcy, one must decide if it is ultimately the best action. When doing so and hiring a lawyer, a consumer will regain his or her financial footing.

This post was submitted by a guest author. If you are interested in submitting a guest post, please contact me.

About Kim Parr

Kim Parr is a private practice optometrist, freelance writer, and personal financial blogger. You can follow her journey to 20/20 financial vision at Eyes on the Dollar.

2 comments

  1. Filing for a Chapter 7 while having substantial liquid assets would mean that most of those assets would get turned over to the trustee for distribution to your creditors. (Each state has it’s own court rules for how much in cash and cash equivalents can be kept and how much must be surrendered. It’s not much that can be kept in most cases – about $350.00 per person generally.)
    A Chapter 13 is appropriate when a debtor’s income is too high to qualify for a Chapter 7 or if there are certain assets that you want to try to save through the bankruptcy rules, such as a home that is about to go into foreclosure. In any case, to qualify for a Chapter 13, you would need to have enough monthly income to pay the court calculated payments without fail.

  2. An article like this is a big help for everyone especially for those who were going to file for bankruptcy to gain more knowledge on what to do and what not to do for filing bankruptcy. Declaring or filing for bankruptcy is a one way to get back on your feet, so you need to have not just enough knowledge but a lot of knowledge upon declaring bankruptcy.

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