If you have ever had problems with your computer, you know that one of the first steps in troubleshooting is to shut it down, unplug it, and fire it up again. Sometimes a fresh start is what your system needs to work again. Filing for bankruptcy can give your finances a similar fresh start, but you may have questions about how the process works.
In general how does the process of filing for bankruptcy work?
It begins in your home, where you gather paperwork from bills, bank statements, tax forms, and any other type of financial record you have. It continues when you meet with an attorney who specializes in this type of law, and who can give you good information to move forward.
Your counsel can tell you if bankruptcy is appropriate for your situation, and which chapter is applicable. Depending on the circumstances, personal bankruptcy can be filed under Chapter 7 or Chapter 13.
So, What is the First Step in Filing for Bankruptcy?
The first thing you must do when filing for personal bankruptcy is collect all your bills and records of assets. The court will need to have evidence of what you owe and what you own to make its decision. Make sure to take the time to gather paperwork from every type of creditor you owe money, from credit cards to hospitals and doctors, because once you file, you cannot add to it.
The next step is to get debt counseling. This will not only teach you about debt and bankruptcy but will give you the skills needed to have a stronger financial future after your bankruptcy case is finished. It also shows the court that you have exhausted all other options.
The key to having a successful bankruptcy case is the third step, which is establishing an open and honest relationship with an attorney who is experienced in filing both types of personal bankruptcy. Deciding which is appropriate can be done when your attorney examines the documents you gathered in step one.
So, How do You Navigate the Bankruptcy Process?
After you meet with your bankruptcy attorney and discuss which chapter will work for your situation, it is time to start the paperwork for the filing process. There will be forms to fill out and fees to pay to begin your case. A stay is ordered when you file, and this communicates to your creditors not to call or write to you about the debt anymore.
Depending on if you file for Chapter 7 or Chapter 13, you may not have to appear in a courtroom. You will have to meet with a court-appointed trustee and your attorney to testify under oath about your debt, and representatives from your creditors may choose to attend. A couple of months after this meeting, you will hear if your debts are discharged or reduced. If they are, then you have a successful case and it should be closed in about a month, or whenever the trustee finishes up.
Related Questions
So, What are Some Differences Between Chapter 7 and Chapter 13?
If you decide to file for Chapter 7, your assets will be liquidated to pay off debt. Not all assets can be touched during this process, and not all debts can be paid off. Chapter 13 does not use your assets to pay off debt, rather, it establishes a timeline for paying off an accepted portion of the debt. Your attorney can guide you to decide which you have a stronger case for.
So, What Happens After the Case is Closed?
Once your bankruptcy case is closed, you put into practice the financial tools learned during credit counseling and begin the scheduled payments if you filed Chapter 13. Bankruptcy will stay on your credit history for 7-10 years and may affect your ability to secure certain types of loans.
Filing Bankruptcy for a Better Future
The bankruptcy process involves presenting your financial situation to a court through an experienced lawyer, who helps you make the best choices to put the past behind you and hit the restart button for a brighter future.
If you have questions or need help deciding on the debt solution that is right for you, contact Hines Law located throughout the greater Boston area. Our bankruptcy attorneys are experienced and have a deep understanding of bankruptcy law so that the process will be done efficiently and with support. Call one of our bankruptcy firm locations today for a Free case evaluation and see if filing is the way to proceed.