How To File Bankruptcy in the US ?
Bankruptcy is very common and continue to rise in today’s era because of struggling economy. It is way by which people or businesses who have too many debts to handle, either to get a plan to repay the money they owe, or to eliminate their debts entirely in exchange. There can be plethora of reason when people declare themselves bankrupt and some of those reasons are very genuine. Despite the scenario it can help individuals get back onto a financial path and give them a fresh start.
How to File for Bankruptcy in the US
Chapter 13 Bankruptcy
Under bankruptcy laws, this is a well thought plan to repay some or all of the money owed over a long period of time. The only downside is that it makes very difficult for people to get any credit in the future. So, you must obtain credit counseling from a non-profit credit counseling agency registered under the federal bankruptcy reform of 2005. The bankruptcy forms are available at stationer stores, or can be arranged from attorney. The process is started by filing a petition with the bankruptcy court in their home district. Filing bankruptcy can be a complicated affair, so get full advice from experts before filing. The chapter numbers are different for farmers and corporations and are taken from the sections of the Bankruptcy Code describing these procedures. So, if you fall into one of these categories you need a specialist advice. A confirmation hearing will be held in the court the bankruptcy judge to check if the plan sounds to be feasible.
Chapter 11 Bankruptcy
This bankruptcy Code is referred to as a “reorganization” bankruptcy. If a petition was dismissed during preceding 180 days, a person cannot file bankruptcy under this chapter or any other chapter. The reason behind dismissal could be the debtor’s failure to appear or comply with orders of the court. A case is started by filing a petition with the bankruptcy court serving in the area where the debtor resides. A disclosure statement containing information concerning the assets, liabilities, and business affairs of the debtor is produced before the court for the final hearing.
Chapter 7 Bankruptcy
Under this chapter, assets are liquidated and most debts are discharged. Choose this option only when no other road is open to you because you will never will able to get any credit in future if you file petition under this. Once the debt start this process, the creditors cannot continue lawsuits or make any telephone calls demanding payment. 20-40 days after the petition is filed a meeting takes place in which both the creditor and the debtor must participate. Take a thorough professional approach and prepare well for this meeting so that you can answer all the questions carefully. Bankruptcy chapter 7 discharges debtor and they are no longer liable for debts, and creditors are prevented from taking any action against them.
What must the Debtor File with the Court ?
Above all, schedules of assets and liabilities:
- A schedule of current income and expenditures
- A schedule of executory contracts and unexpired leases
- A statement of financial affairs
It is sufficient to enable a creditor to make an informed judgment. A debtor will remain a debtor until the his reorganization plan is formally confirmed and rubber stamped. The same applies until the debtor’s case is dismissed or converted to another chapter. One must definitely consult bankruptcy lawyers as the situation gets extremely complicated depending on each individual’s circumstances.
The experts can solve the situation quickly and come up with the best form of action according to circumstances.
