Knowing How to Claim Bankruptcy
If you find yourself in a tough spot financially and have nowhere else to turn, then a bankruptcy claim may be your only option. Although there are multiple programs available to help people avoid the bankruptcy process, there are times when a debtor simply has no other choice.
Typically, personal bankruptcy is reserved for people that have lost their assets, either through careless financial decisions or through unfortunate life events. For these people, it really is about starting over. Although bankruptcy provides the means to start anew, most people are intimidated by the process; they have no idea how to claim bankruptcy and don’t know where to turn. Fortunately, the process itself is not quite simple.
In order to begin the filing phase you will first need to collect your financial information, which will include a list of your assets, liabilities (debts) and your household income figure. Once this information has been gathered, you will need to determine the type of bankruptcy that will best suit your circumstances – Chapter 7 or Chapter 13.
Essentially, Chapter 7 is the form of bankruptcy that allows the debtor to “walk away” from a significant portion of their debt. Because the debtor that chooses Chapter 7 likely doesn’t have many assets to cover their debt repayment, much of the debt is wiped clean.
On the other hand, Chapter 13 is meant for people that have real assets that they wish to protect. This form of protection creates a repayment plan for the debtor, which allows them to get caught up on their obligations to their creditors while retaining their personal property.
Chapter 7 bankruptcies typically lasts about 8 years, during which time your credit will take a massive hit. Although it’s possible to begin the credit repair process during those 8 years, doing so will require vigilance on your part to ensure that all of your bills are paid on time.
If all of this sounds overly complicated then it may make sense for you to contact a qualified attorney who can help to set things straight in your mind. Attorneys are easy to find and can provide assistance when you need it most.
