A Simple Guide About What Happens When You File for Bankruptcy
Whereas the process of applying for some loan can be as simple as meeting the qualifications, situations may arise when you are not able to pay the loans back. One area of concern once you realize you are bot able to settle all the debts is the next step that is best for you. Most people and even businesses may never like the discussion about bankruptcy but now that it has already hit some people, you must know some key things about this big threat. Read more here now to get more info about what happens when you file for bankruptcy.
To begin with, you need to know how it all happens in court. The decision about bankruptcy is made in court and this is through a judge and an independent contractor who is hired for this service. The decision on whether you are eligible for bankruptcy is made after both the judge and the trustee have reviewed information to declare you bankrupt or not.
Another important point for you to note is the fact that we have very many types of bankruptcy. Among the various types of bankruptcy is chapter 11, chapter 12 and chapter 13 whereas chapter 7 is the most common one. You should also know that chapter 12 is occupation-based occupation-based as explained on this page. Although chapter 7 bankruptcy may forgive most of the debts, you may have to sell some of the important bassets that you own to pay the debt.
Bankruptcy filing is both a long and expensive task. Remember you will have to meet the credit counselor for bankruptcy and debt as well as putting all the relevant information in place for the process. Be prompt to show the court that you made efforts in ensuring that everything is settled.
You also need to know that normally there are plans to have a look at your financial situation as arranged by the court. This is done by the court trustee, the lawyer and the creditor. You should, however, have it that the process takes several days or even months and in some cases could go as long as 6 months. Above are the important things to know when filing for bankruptcy.
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