Filing for individual bankruptcy is one of the worst financial events that can happen to someone. In our society, it brings embarrassment and a stigma that can literally destroy the psyche of some. But, sometimes, circumstances leave you with no other choice than to file for bankruptcy.
A person filing for individual bankruptcy typically has a choice between Chapter 7 bankruptcy and Chapter 13 bankruptcy. Based on statistics, most individuals end up filing for Chapter 7 bankruptcy. Under Chapter 7, the court will liquidate certain of their assets and give the money derived from them to the creditors. In return the debt to the creditors will be deemed paid.
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If the person has a stable job with stable income, however, he may decide to file under Chapter 13. The benefit in filing this way is that the person's assets will not be sold. He will be required, however, to enter into an agreement with the courts to pay off his debts within, at most, a five month period. With either type of filing, the record of the bankruptcy will end up on the person's credit report.
Your lawyer will inform you of what you need when you show up for your court date. But normally you'll be required to show evidence of your current assets, income, expenses, and debts (secured and unsecured). This includes things such as income tax statements, utility bills, bank statements, credit card bills, mortgages, and so on. Make sure you bring everything so the court has all the information it needs to make a determination of your case.
When you file for individual bankruptcy, the hope is that you'll get a fresh start by having all of your debts discharged. There are some debts, however, that the courts typically will not discharge. For example, if you have back taxes, it's extremely unlikely that they will be discharged. It's also unlikely that child support debts will be discharged. A good idea is to talk to your lawyer before beginning individual bankruptcy proceedings. After looking over your financial data he will be able to give you a good idea of what debts you will be left with after the bankruptcy goes through.
If the court approves your bankruptcy request, it will determine which of your debts will be discharged and which ones will remain on the books. The court will also notify your creditors of your bankruptcy status. The court will also determine which of your assets you can keep. The assets that you can't keep will be sold or auctioned off to raise money for the creditors. What you can and can't keep varies from state to state. Your bankruptcy lawyer can tell you what the rules are in your individual state.
Deciding to file for bankruptcy is a hard choice to make. Because of the stigma attached to it, many people are deathly afraid of bankruptcy. But, in many cases, it's the best choice to make - both financially and psychologically.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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