Filing for bankruptcy can be a scary task especially if you do not know how to go about it. When you decide to file for bankruptcy, you see this as a chance to redeem yourself form debt and get a fresh start. Most debtors will have looked into other options before settling for bankruptcy. When you decide to choose this path you have to be aware and prepared for the consequences.

It is always necessary to ensure that your important assets like your home are protected. When you make the decision to file for bankruptcy, you are permitted to keep exempt property. Research and look for a lawyer who is experienced in this kind of case and has thorough knowledge in this field. When you begin the filing process, you first need to put together all your personal financial information. This also includes secured and unsecured debts, tax returns, assets etc.

With the guidance of your lawyer, decide the type of bankruptcy you file under. You have the choice of filing under chapter 7 whereby you have your assets liquidated and the proceeds repaid to the creditors. Your other option is Chapter 13, which involves a reorganization plan to repay creditors in installments over a period of three to five years. Under chapter 7, the filer is required to pass a means test. If you are making more than the average state median, then you may file under chapter 13. While you get a fresh start when you file for bankruptcy, your credit score is affected for years to come. However, you will still be eligible after you get your discharge.

Filing for personal bankruptcy is meant to protect the debtor and is not as difficult as most people seem to think; especially if you are guided by a qualified lawyer.

Mercy Maranga writes content on Finance and Debt Management. Visit her site here for more information on Finance and how to effectively Manage your debts. Bankruptcy

Tagged with: • •

Filed under: Bankruptcy Personal

Like this post? Subscribe to my RSS feed and get loads more!