You are behind on your car payments, mortgage, credit card bills and debt collectors are lining up at your door wanting money you do not have.
Bankruptcy is an option to look into. If the bulk of your debt is unsecured credit cards, you have spoken with credit repair agencies and they cannot help, it is time to call an attorney.
What to expect
Most attorneys offer a free consultation at which they ask questions about your finances and nature of your debt. The attorney will explain the different chapters and tell you for which you qualify.
Chapter 7 serves individuals who wish to extinguish all unsecured debt but want to continue paying secured debts such as car payments and mortgage payments.
Chapter 9 is for large municipalities.
Chapter 11 covers the needs of large corporations and sometimes individuals.
Chapter 12 allows you to make payment arrangements with creditors. You will pay back a small percentage of unsecured debt but all the remaining debt on secured loans.
Chapter 13 applies to farmers and their families.
Your to do list
Credit counseling – You must attend two separate credit-counseling courses before your court date. You can attend the classes online or choose from a schedule of local classes your attorney provides. Pay the fees in advance and receive you certificates upon passing tests for both.
Attorney and filing fees – Your case cannot be filed until all fees are paid. The attorney will present options and you choose.
Total amount you owe – Have proof of all your debt by making copies of utility bills, collection notices and signed disclosures from anyone to whom you owe money.
Get a credit report – You get one free credit report per year. Do not use a service that allows you to get a report free when you pay for their monthly service. You can get a 100-percent free credit report from free credit report dot government .
List your assets – You must list all the real estate, vehicles, personal items and any money owed to you. Your vehicles include automobiles, boats, ATVs, trailers, fifth –wheels and motorcycles. Your personal property is the value of all your clothing, jewelry, electronics and appliances you own. Money owed to you is money you have whether it is collected or not.
If you have forgotten anything before your court date, write it down, sign it and give it to your attorney to amend your file.
The next step
Addition and subtraction – The attorney will add your debt and assets, subtract one from the other and you will continue to the next phase, if the numbers qualify you.
The paperwork – You can choose for paralegals fill out the required paperwork for an additional fee, or you can do it yourself. There is a lot of paperwork and copies are required.
Going to court – After your paperwork is in, fees paid and a court date set, you wait. On your court date, the mediator will ask you a few questions and decide to approve or dismiss your bankruptcy request.
This completes the process for filing a bankruptcy and after six months, the procedure is complete.