Are You Sure About Bankruptcy?

Are You Sure About Bankruptcy?Although you can file for bankruptcy on your own, it is important to first at least have a consultation with an attorney. This will help to make sure you are doing things right. Attorneys can specialize in bankruptcy and know the ins and outs a lot better to make sure you are doing the best thing and not missing anything.

For instance, Kirkpatrick & Associates Covington is a great firm to speak with. They are extremely knowledgeable on the topic and can help you through the process. First when considering whether or not you should file for bankruptcy you will be required to attend approximately six months of credit counseling and at the end you will take a test to see whether Chapter 7 or Chapter 13 is more suited to your needs.

With a Chapter 13 you will set up a specific payment plan including payment and time period to pay back the loan to pay back your creditors on payments that are overdue. The time period used it typically about five years. The Court needs to approve your payment plan and this happens once they have sufficient evidence that you have the financial means to pay the debts back as you have outlined. With a Chapter 7 you have to fill out a bunch of paperwork detailing all of the property you own and assign a value to each item. You then typically have a hearing where your creditors get to determine whether each item should be part of the bankruptcy. A trustee will then take these items and work on converting them into cash to pay back your creditors.

It is important to understand that once a bankruptcy claim is filed, an automatic stay in put in place which prevents creditors from furthering harassing you for payment during the proceedings. A month or so after you file your claim, your trustee with meet with creditors to discus your bankruptcy. The trustee acts as the intermediary between you and the creditors so that you don’t keep receiving harassment from creditors. The trustee will go over the paperwork with you and make sure there aren’t any discrepancies with values you have assigned different items of property you listed. Based on your goals, assets, debts, income and expenses filing for bankruptcy can help wipe out most types of debt including credit cards and medical bills, reduce monthly payments, stop creditor harassment, stop repossession of your vehicle, stop the foreclosure of your residence, stop wage garnishments, and even stop the stress caused by debt collectors.

Remember that filing for bankruptcy can affect your credit score anywhere from 300-600 points. Chances are that if you are in such a financial rut, you already have a low score, perhaps around 500 so a hit like that is suicide and not to be taken lightly. I think we as average individuals don’t always realize what all is determined from our credit score. It is an important deciding factor in a lot of our everyday living arrangements. Although bankruptcy filing isn’t the end, make sure you understand all the repercussions before you make this life changing decision. It can ultimately help you, but it’ll be a long and tough road to endure. 

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