Different Ways to File the Bankruptcy & Tips for Filing Bankruptcy


(1) Consider of All The Alternatives

Filing bankruptcy should always be the last choice, as it will remain on your credit file for up to ten years. Pursue it after careful consideration of all alternatives. The new bankruptcy abuse prevention and consumer protection act of 2005 necessitates consumers to receive credit counseling from an entity approved by the U.S trustee within 180 days of filing.

Such counseling provides an individual with alternatives such as non profit debt consolidation which are relatively less harsh on your credit. However if you are considering filling for bankruptcy, it will allow you to make a fresh start.

(2) Choose Between the Two Common Types

Most individual will choose between filing a chapter7 bankruptcy and a chapter 13 bankruptcy.

In a Chapter7 (“straight bankruptcy or liquidation)

(a) A trustee is appointed to oversee your property.
(b) The trustee will sell some of your assets to pay your creditors.
(c) Depending upon the laws of your state, you will be allowed to keep some personal property.
(d) Most debts should be cancelled

Since October 2005 there are some incomes restrictions on who will qualify for chapters 7. You are also most likely be unable to file a chapter7 bankruptcy if you have filed and dismissed a chapter7 petition in the last 180 days.

A Chapter13 bankruptcy is usually for people who have regular income, but also have lots of unsecured debts and debt tied to property which they don’t want to loose. This type of bankruptcy can specially be useful when the debtor feels that his problem is not permanent or for a very long period.

In a Chapter13 (“wage earner bankruptcy”)

(a) You will propose a repayment plans for your debts.
(b) If approved an appointed trustee will collect your payments, distribute them to your creditors, and supervise your compliance.
(c) You will have to pay the trustee’s fees

Corporations and partnerships cannot file a “chapter13” bankruptcy.

Debtors whose debt exceeds certain limits are barred from filing for chapter13 bankruptcy. And like the case in chapter7 here also you will most likely be unable to file a chapter13 bankruptcy if you have filed and dismissed a chapter13 petition in the last 180 days.

(3) Choose A Bankruptcy Attorney

Look for an experienced attorney with some experience in the court room. Someone, who provides personal and specialized services, for that, you can interview multiple lawyers with good confidentiality ratings and choose the best one. After hiring a lawyer you can feel free, as he will be able to speak on your behalf to all your creditors and once the case has been filed by your lawyer, the automatic stay goes into effect.


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