If you are considering retaining a bankruptcy lawyer, such as one at Gruber Law, and filing for bankruptcy, you’re probably very curious as to the process. No matter the type of bankruptcy you file for, there are generally four steps involved with filing for bankruptcy, as we’ll explain below.
The Process of Filing for Bankruptcy
When you file for bankruptcy, no matter the type, you’ll have to provide a financial inventory of your assets, receive credit counseling, attending a meeting of your creditors and complete a post-bankruptcy credit counseling session.
-Before you file for bankruptcy, you’ll create a financial inventory that includes an overview of your debts, expenses, income, assets, and property.
-Credit counseling must be completed with a counselor that is approved by the bankruptcy court.
-After you file for bankruptcy, you’ll attend a creditors’ meeting to discuss the terms of reorganizing or discharging your debt. Once those terms are agreed to, you attend credit counseling again in order to help you prevent future bankruptcy.
Type of Bankruptcy Determines How Debt is Handled
The type of bankruptcy you file helps to determine how your debt is handled. If you file for Chapter 7 bankruptcy, also referred to as a liquidation bankruptcy, you’ll liquidate your assets in order to pay off as much debt as possible. Any remaining debt is then discharged.
If you file for Chapter 13 bankruptcy, you’re reorganizing your debt and you’ll be required to follow a structured repayment plan, generally paying off your debt within three to five years.
If you have a staggering amount of debt, there’s no doubt you realize that is a major source of stress. The phone rings off the hook with debt collectors calling to collect payment, and you may even find yourself answering the door one day to a process server serving you with a lawsuit from one of those debt collectors. Worse yet, losing that lawsuit can cause paycheck garnishment or your bank account seized.
Fortunately for you, there are options in the form of bankruptcy. Filing for bankruptcy stops creditors from harassing you, and if you’re facing foreclosure, bankruptcy puts that action on hold. However, before you take the plunge and file, it’s helpful to learn a bit more about the bankruptcy process.
No Need to Sell Valuable Assets
Chapter 7 is a good option for those who qualify. It allows you to start with a clean slate, and you don’t have to repay your debts. You must qualify for Chapter 7, and you will have to sell some of your valuable assets. Before filing, you’re required to go through credit counseling. A Troy, Ohio bankruptcy attorney can help determine if you’re eligible to file for Chapter 7.
Re-Organize Your Debt
Chapter 13 does not erase your debt, instead, it allows you to re-organize and pay your debt off over a period of time, all while the bankruptcy court oversees your payment plan. You must have a consistent income stream in order to qualify for Chapter 13.
It is also important to mention that you cannot discharge (most) tax debt or student loan debt through bankruptcy.
For more information on filing for bankruptcy or the bankruptcy process, please contact an attorney who is highly experienced in bankruptcy law and its procedures.