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Declaring Yourself Bankrupt – What You Should Do

Todays Date: November 21, 2018

Believe it or not, the bankruptcy laws are there for your protection. The old days of companies, particularly credit card companies, rewarding people for loyalty have long gone and in the current economic climate financial institutions generally have only one interest – their bottom line. Declaring yourself bankrupt offers a way out.

Under the 2005 Bankruptcy Abuse Prevention anhd Consumer Protection Act, it is law that anyone filing for bankruptcy must attend consumer credit councelling within 180 days of filing. This is to make every individual considering bankruptcy aware of the alternatives, so that bankruptcy is filed only as a last resort.

If, after counselling, it is decided that bankruptcy is the only way forward, certain decisions have to be made.

The first thing to do is to determine the relevant chapter to file under. The two main chapters are 7 and 13. Chapter 7 results in the selling of your goods, afterwhich you have no further liability for any debt and is therefore often the most favored option. Chapter 13 is a 3 – 5 year repayment plan. Which type you file under is often determined by the means test applied under the BAPCPA rules.

The second thing to consider is legal representation. Ironically, declaring yourself bankrupt is not an area where you want to save money. Lawyers are not cheap, but it is highly recommended that you hire one, and make sure they are aware of the laws in your state.

Thirdly, once you have decided to file, do not use your credit cards. This is because your case could be revoked if you have willingly taken on debt that you know you cannot afford to repay.

When your lawyer files your case your creditors are subject to “automatic stay”. This means they can no longer chase you for payment. Instead they have to deal with your lawyer directly.

Shortly after filing, you will be notified by mail (usually) of a “341 meeting”. This is from section 341 of the bancruptcy code and is also called a creditors meeting. Here you submit details of income and expenditure, as well as a list of creditors. You are then asked a series of questions under oath, so that the court is satisfied that you are indeed in the precarious financial situation you claim.

Once your assets have been sold and the proceeds disbursed among your creditors you no longer owe anything, even if your assets were insuficient to cover all outstanding debt, (chapter 7 filing). A notice of discharge will be sent out after 60 days.

Chapter 13 works differently to 7 in that no assets are sold. A repayment plan is drawn up, the terms of which are determined by means test and can be harsh, to repay all your creditors over a 3 – 5 year period. The bankruptcy is discharged when the repayment plan is complete and 30 – 60 days have passed since the final payment.

For more free informaticregardingcerning cregardingcerning bankruptcy go to www.declaringyourselfbankrupt.org where you will find a load of useful informaticregardingcerning and tips cregardingcerning declaring yourself bankrupt.

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