A Beginner’s Guide to Filing Bankruptcy

There is a lot involved in filing bankruptcy. Forget about the long process you go through when filing bankruptcy. It comes with a lot of fear. Many people are eligible to file bankruptcy, but because they don’t know what is involved in the process, they end up changing their minds.

If you are thinking about filing for personal bankruptcy, talk to a Toledo bankruptcy lawyer to know your options. Continue reading for a complete guide on what you should know when filing for bankruptcy.

Which type of personal bankruptcy do you want to file?

There are two types of personal bankruptcy that you can file:

Chapter 13/ Reorganization Bankruptcy: this is a type of bankruptcy that enables you (filer) to organize for a payment plan with those you owe. It will take you a maximum of five years to finalize this type of bankruptcy.

Chapter 7 /Liquidation Bankruptcy: this is a type of bankruptcy that discharges all your accumulated unsecured debts like personal loans and credit card debts. You have to fall within a specific income tier to qualify for liquidation bankruptcy. That means you can sell some assets before you file for this type of bankruptcy. It takes a maximum of four months to file for liquidation bankruptcy.

Bankruptcy may not remove all your debts.

Failing for personal bankruptcy may not exempt you from servicing some forms of debts like overdue child support and back taxes. The court may not release some forms of debt when you file for bankruptcy.

Therefore, you should consult your bankruptcy attorney before you opt for filing bankruptcy because it may not be a scapegoat for paying your debts.

Go for credit counseling first

The government requires every person filing bankruptcy to take a debtor education course or go for credit counseling before they can go ahead to file bankruptcy.

If you want to improve your chances of qualifying to file for bankruptcy, you must first take a government-approved creditor course. On completing the course, ensure you get a certificate to act as proof that you attended the course.

Reach out to a certified bankruptcy attorney

Most bankruptcy filers do not even have the money to hire an experienced bankruptcy attorney. However, by seeking the right legal counsel, you actually save a lot of money in the long run and improve your chances of a successful bankruptcy filing.

A bankruptcy attorney will explain the bankruptcy laws to you. This way, you can know which debts will be released and which ones will not. An attorney will also help you to fill all the forms correctly and guide you through all the court proceedings and policies.

Wrap up

Before you file your bankruptcy petition, you must ensure that you are ready. There are different types of bankruptcy you can file depending on your financial situation. Whether you are filing bankruptcy for your business or personal, you must first seek financial assistance from a professional.

Bankruptcy can sound a bit scary, but in most cases, it is the best solution if you want to get your finances on the right track. With this guide, you are better positioned to file for bankruptcy.