Declaring Yourself Bankrupt - What You Should Do
Although it may seem perverse, the bankruptcy laws are there to protect people. The economic boom years have now passed, and no matter how loyal you may have been to any financial institution this now counts for little. All these institutions are interested in is getting their money. Declaring yourself bankrupt give you the opportunity to get out of debt and start again.
Under the 2005 Bankruptcy Abuse Prevention anhd Consumer Protection Act, it is law that anyone filing for bankruptcy must attend consumer credit councelling within 180 days of filing. This is to make every individual considering bankruptcy aware of the alternatives, so that bankruptcy is filed only as a last resort.
Having attended councelling, if bankruptcy is considered to be the only option, the following steps have to be taken:
Firstly, you have to decide which type of bankruptcy you are going to file under, the two most common being chapter 7 and chapter 13. Chapter 7 is often seen as the preferred option, but under the new BAPCPA rules, all applicants for bankruptcy have to undergo a means test, the result of which often forces individuals into chapter 13.
Next thing is to think about whether or not you employ the services of a lawyer. I would strongly suggest you do. This is your financial future at stake and you should have the best legal representation you can afford.
Thirdly, once you have decided to file, do not use your credit cards. This is because your case could be revoked if you have willingly taken on debt that you know you cannot afford to repay.
Once your case has been filed, you are protected by what is called “automatic stay”. This means that no creditor may contact you regarding any debt. They may only approach your lawyer which means you will be left in peace.
Shortly after filing, you will be notified by mail (usually) of a “341 meeting”. This is from section 341 of the bancruptcy code and is also called a creditors meeting. Here you submit details of income and expenditure, as well as a list of creditors. You are then asked a series of questions under oath, so that the court is satisfied that you are indeed in the precarious financial situation you claim.
The trustee then arranges liquidation of your assets with the proceeds used to pay off as much debt as possible. Once this has been done you are no longer liable for any debt left over. Approximately 60 days later you will receive notice of discharge. This is the case for a chapter 7 bankruptcy.
In a chapter 13 case, a repayment plan is implemented over a 3 - 5 year period in accordance with the findings of the means test. There are no assets sold. Notice of discharge is usually received 30 - 60 days after the last payment has been made.
For further free informatiabout about bankruptcy go to www.declaringyourselfbankrupt.org where you will find a load of useful informatiabout and advice about declaring yourself bankrupt. This and other unique content ” articles are available with free reprint rights.
