How To Declare Bankruptcy

How To Declare Bankruptcy

Before you look at how to declare bankruptcy you need to have a made a decision about what type of bankruptcy you are going to declare.  There are many types of bankruptcy chapters.  For our purposes here today we are going to look at personal bankruptcy.  For personal bankruptcy there are really only two types that you will need to decide from.  These are

Filing Chapter 7 bankruptcy and Filing Chapter 13 bankruptcy.

So what is the difference between Chapter 7 and Chapter 13 bankruptcy.  Very simply put:

Chapter 7 is where all your debts are written off by your creditors.  This is where there is absolutely no chance of you being able to pay off these debts, so there really is no point in your creditors chasing you for them.

Chapter 13 is where you will come to an agreement with your creditors about what amount you will pay off the debt owed to them and over what period of time.  You will usually employ the services of a professional person or agency for this type of bankruptcy and they will do all the negotiation and mediation for you.  Chapter 13 is suitable for people who do have an income that can potentially pay off some of the debts over an extended period of time (usually up 5 years).  You will be given a payment plan which you will have to stick to.  You can prepare your own payment plan but this will have to be approved by the courts.

If you are an individual then you are allowed to file a do it yourself  bankruptcy.  But be warned, this is not such a good idea if you have a complicated or complex situation, but may well save you money in a simple straight forward type of bankruptcy.  If you are a partnership or a corporation you MUST have a bankruptcy attorney or lawyer.

How To Declare Bankruptcy Step 1

• The very first thing you need to do if you have not already done it is list out all your debts.  Each and ever one of them.  Absolutely every organisation and person you owe money to. Do not leave out anything.
• Then list the minimum payments you are expected to make to each of them.
• Next list how far you are behind (if indeed you are) with them.  This would be called arrears.
• Next list out all your earnings, and by earnings we mean All money coming into your bank account.

If you are having difficulty deciding which bankruptcy to declare then get a free consultation from a bankruptcy attorney.  Nearly all of them offer a free consultation call.  Make use of this it is a great service. Be prepared for your call by having the list you have made above to hand, you can even ask the bankruptcy specialist if you can send it to them before hand so they have access to it.  Most of the time your free consultation will take place over the phone, but if you live near the attorney then you can also do it face to face.

Remember this can be quiet a traumatic time for you, as it is for millions of people (so you are not alone). And by doing all of the above you are doing something really positive to help move you from a situation that you have not control over, and that is probably haunting your every waking thought to a situation that has been sorted legally and that can give you a fresh start in life. Keep that in mind. A new beginning where you are not afraid to open the mail, answer the door or pick up your telelphone.  Imagine that if you can and just keep going. You are going in the right direction.

How To File For Bankruptcy Step 2

Once you have decided what type of bankruptcy to declare, then you legally have to have a credit counseling for bankruptcy session with a qualified and certified professional.  You will receive a credit counseling certificate after you have completed this, which you must keep because you will need to produce this when you declare and file.   You can even do these sessions online just make sure they are fully  approved and your credit counseling certificate is valid.  Make sure you ask in advance about their fees (should be about $50 or less). So Whats next on the how to declare bankrutpcy list:

How To Declare Bankruptcy Step 3

At this stage it is best to contact your local court. Ask to be put through to the bankruptcy section.  This is where you have a conversation with them about their process for dealing with bankruptcy.  They will send you a link to the forms you need to fill out.  They can also help answer any questions if you get stuck and they will then advise what to do with your completed forms, and the next stages. Check out the website of your local bankruptcy court for help.  There can be some invaluable free information on there to assist you. They will especially be able to guide you on how to declare bankruptcy in your own state and local area.

You may or may not be required to appear briefly in front of the judge who will be completing your file, do not let this daunt you in any way it is really just a formality.  They are not there to judge you or to reprimand you, they are just there to make sure everything is in order legally., so that it is all done correctly for you. They may not even speak to you, and if they do I assure you it will most likely be in the kindest way, as they surely know what you are going through and they understand that no one really chooses this path lightly.

At this point confirm the filing charges with them (about $300) and preferred method of payment (usually cash, sorry no credit cards allowed).

If you are considering using a bankruptcy attorney please check out what you should expect to pay for bankruptcy attorney fees.

Our Top How To Declare Bankruptcy Tips

You may know the process for how to declare bankruptcy, but you must make sure that you are declaring the right bankruptcy for you and your own situation. Get all the free advice that you can.

• Make those free consultation calls to the bankruptcy attornies.  These are invaluable. Make more than one if you need to, after all they are free.
• Talk to your local court.
• Be completely upfront and honest in all your dealings and paperwork. Don’t try and fool anyone especially yourself.  Everyone you will be dealing with will have heard it all before, so you will shock no-one.

You must get this right, this is the start of your new financial life, get it wrong and you may pay the penalties for years to come.  The bankruptcy courts do not look at mistakes or omissions kindly and they can view them as bankruptcy fraud, which is very serious, and all because you made a silly mistake.

If you have the funds available to you then get the help and assistance of a bankruptcy attorney.  You may be able to negotiate a payment plan with them for their fees.  You mabe be able to pay them in instalments.  But make sure you check them out first and that you speak to them so you can decide if you can work with them.  Make sure they specialise in how to declare bankruptcy in your state and area.