The term bankruptcy can render thoughts of destitution and fear. Successful individuals, corporate moguls and blue collar citizens alike have had to file for bankruptcy. Most people will avoid filing for bankruptcy for as long as possible, however, there may come a time where filing is the best option for you . Individuals who declare bankruptcy generally can answer “yes” to a serious of questions regarding their financial situations.
- Are you in high credit card debt?
- Have you accrued debt in the past that was not paid off?
- Are collectors calling you or sending letters to you for payments?
- Do you only pay minimum payments to your credit cards?
- Have you, or do you use credit cards to pay for all of your financial endeavors?
- Has the overhead of your debt increased to a point where paying it off has become impossible?
If you answered yes to many or all of these questions , now may be a good time to declare bankruptcy.
How will bankruptcy affect me?
If you feel that declaring bankruptcy is the best option for you at this point, there a few things you should know. Declaring bankruptcy will eliminate the calls, collection letters and repossession of your belongings. Most debts are dischargeable, which means that if you file for bankruptcy, you can assume that a lot of the debt is considered gone, giving you a fresh start. Bankruptcy is usually declared by people facing extreme hardships such as job loss, divorce or separation, a severe illness or family emergency or those who have acquired a substantial amount of previous debt. Remember, if you file for bankruptcy, this does not make you a bad person! In fact, over 2,000 Americans filed for bankruptcy in 2005 alone. Plenty of times people fall into hardships and sometimes the money to pay back the debt just is not available. Filling for bankruptcy is often the best option for them.
Where do I begin?
Declaring yourself bankrupt starts with the simple process of admitting that you may be in over your head. After coming to terms with the fact that paying of your acquired debts may not be possible, filing for bankruptcy can help. The first step in legally declaring yourself bankrupt is gathering all necessary documents. This includes past pay stubs or income verification, all asset information including insurance policies and 401k, creditor information documents and the last 2 years of your filed tax returns.
Once this is available, you need to complete a credit counseling class. These classes will need to be attended at least 6 months prior to declaring your bankruptcy. If you have attended the mandatory class and still find that bankruptcy is the best option for you, there are two ways that you can declare bankruptcy. The two types of bankruptcy are a Chapter 7 bankruptcy which is a liquidation proceeding or a Chapter 13 bankruptcy which is also referred to a reorganization bankruptcy. If you are unsure of which type of bankruptcy to file and are ready to speak with an experienced bankruptcy attorney to help in your proceedings, contact The Law Offices to get started.