Many Americans have found themselves in way over their head in debt, and in spite of every attempt to change spending habits, and they have considered all possible options, in order to overcome the financial burden, nothing about their situation has changed. After a while, it seems the only way out from under this never-ending battle of financial distress is to file bankruptcy. Many just do not want to deal with the embarrassment of filing bankruptcy or just do not know how to get it started. After reading this article, those who are in financial limbo should have a better understanding of how to declare yourself bankrupt and how to get the process started.
Declaring yourself bankrupt is not as difficult as many believe. Bankruptcy cases have increased by over 30 percent in the last year, with 1.4 million bankruptcy cases already on the books. In 2005 there were some major reforms put into place in the bankruptcy codes, which made them much more complicated then before and made it so that now the best way to go through the bankruptcy process is with the help of an attorney who has studied and is very familiar with bankruptcy laws and procedures.
Once the decision to file bankruptcy has been made, it is now time to find out how to declare yourself bankrupt. The first step is to locate and meet with a reputable attorney that specializes in bankruptcy. Reaching the decision as to the right type bankruptcy to file will be made with the help of your attorney. The type bankruptcy to be filed mainly depends on the person’s particular circumstances. There are two different types, which individuals can file, and they include, Chapters 7 and 13.
A Chapter 7 bankruptcy is a case where the debtor is allowed to keep “exempt” properties, such as one home and car, while the rest of their assets are liquidated by a Trustee that is appointed by the Federal courts. The Trustee distributes the funds received from the liquidation to the creditors who have filed a claim in the bankruptcy proceedings.
Chapter 13 bankruptcy cases are designed for those who have a regular income and it allows them to repay just a portion or all of their debt over a period of time, usually three or five years. This type bankruptcy is good for a debtor who wants to and is able to retain certain assets, such as their home, through the repayment plan.
Once you declare yourself bankrupt and you know which Chapter is the one that will work for your particular situation, then it is time to let your attorney do their job. You will be required to complete and received a certificate from an approved financial management course, once this task is complete, the attorney will file a petition for bankruptcy with the court on your behalf. Upon receipt of the petition to file is received by the courts, a notice will be sent out to your credits alerting them to your filing. A hearing will be scheduled for you to appear and answer some questions for the court. In the mean time, all creditors will have a deadline in order to put a claim objecting to the discharge of their debt in on your petition. Once this deadline is past, a hearing will be set up for you to appear before the court one more time. If you have complied with all requirements of the court, the discharge will be entered into and declared in your favor, at this hearing. Depending on the Chapter filed, you will proceed per the instructions of the court and Trustee for your case.
Declaring yourself bankrupt may not be a route you want to take but it is also the best way to go in order to help you get your financial life back on track again.
Tags: declare yourself bankrupt, declaring yourself bankrupt, how to declare yourself bankrupt