How to File Bankruptcy

Making the decision to file bankruptcy is one of the most important decisions you will ever make. There is so much media hype that it’s very challenging to sort the pros from the cons. When you have made your decision, you’ve taken the first step. But what happens after that? Where do you go to learn how to file bankruptcy?
Bankruptcy in Four Steps

Consider all of your options. See “Things to Consider” below:

Hire an attorney who specializes in bankruptcy law. See “Invest in a Bankruptcy Attorney” below. You will have to pay the attorney fees before he files your petition for bankruptcy. Consider finding legal help with this process. A good attorney or bankruptcy specialty firm will help you do everything correctly and ensure that you follow all of the right steps to ensure that you don’t lose your property. Bankruptcy specialists can also file your bankruptcy in ways that will minimize the impact on your credit.

Complete a qualified credit counseling course BAPCPA; Bankruptcy Abuse Prevention and Consumer Protection Act.You must earn the certificate for this course in order to be approved for bankruptcy in your local bankruptcy court. This must be completed within 180 days of the initial file date of your bankruptcy.

Complete the filing process with your attorney. Once you’ve completed the credit counseling course, your attorney will file your bankruptcy petition.

Things to Consider: Bankruptcy Alternatives

Bankruptcy will haunt you for years. It’s not always a “fresh start.” If you’re unsure whether or not bankruptcy is for you, check if some of these alternatives are worth considering.

  •     Credit counseling
  •     Financial coaching
  •     Debt consolidation
  •     Loan modification
  •     Refinancing

Pros of Filing Bankruptcy

  • Upon filing bankruptcy, you will receive “automatic stay,” which prevents creditors from proceeding with debt collection or seizing your assets.
  • Once your case is heard in court, you’ll receive relief from many – or all – of your debts.
  • Creditors can’t foreclose on your home.
  • Your wages won’t be garnished.
  • You’ll have relief from the IRS.

Cons of Filing Bankruptcy

  • Many creditors may decide to completely stop doing business with you even after the bankruptcy leaves your credit report.
  • Bankruptcy stays on your credit report and record for up to ten years.
  • You may have trouble financing even with “guaranteed” sources such as note lots for cars and lease to own appliances.
  • The big bills will stay with you. You will still have to pay your mortgage, student loans, and most taxes.

Invest in a Bankruptcy Attorney

Finding bankruptcy legal counsel can save you many headaches and is probably one of the most important investments you’ll ever make. Find a solid attorney via word of mouth and checking references. The money you’ll save through quicker credit recovery, fewer problems renting or financing a home, or applying for jobs is well worth an investment now.

Bankruptcy is an ugly process. Knowing how to file bankruptcy correctly and finding good legal guidance can help make this process as painless as possible.

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