How to File for Bankruptcy- Tips and Tricks
Bankruptcy can give you a number of benefits including the ability to discharge your debts without any penalties or levies. Once you file, however, the bankruptcy protection lasts only until you file all the necessary paperwork and have discharged your debts from the bankruptcy process. The most obvious benefit of filing for bankruptcy is it can erase most of your debts immediately.
If you’ve been unable to repay your creditors, you could be eligible for a discharge of the remaining debts as long as you still have not started new businesses or have yet accessed most of your retirement assets. Otherwise, you could file for Chapter 13, an option that allows you to reorganise your debts into a single payment and reorganise your other assets. You would probably have to declare the nature of the bankruptcy and file an application with the court. While the bankruptcy administrator will oversee the bankruptcy proceedings, the court must confirm that the measures being taken are indeed necessary for you to fulfil the requirements of the bankruptcy court order.
Once the court has deemed that you qualify for bankruptcy protection, the next step is to set up a trustee’s sale of all your assets. This includes any retirement assets, stock options, bonds, annuities, cash in bank accounts and real estate properties. While it is usual for the trustee to report the progress of the liquidations to the bankruptcy court, he may also let you know personally so that you can work out alternative strategies to achieve a goal of clearing your debts before the scheduled liquidation. Once you’re through with this stage, the trustee will be paid the lump sum amount by the court. The purpose of the liquidation is to pay off your creditors along with any accumulated interest.
This brings us to the next step in filing for bankruptcy protection – contacting your creditors. If your unsecured debts total at least $10000, you are required to give your creditors notice that you will be filing for bankruptcy protection. Most people tend to ignore this requirement, but this can place you in a much higher interest rate bracket with your creditors. Creditors are also annoyed when debtors fail to make payments to them on time which could have easily been avoided if payments were made on time in the first place.
Once you’re through with this step, the final step in filing for bankruptcy protection is to contact your bankruptcy trustee and arrange for the transfer of your remaining debts to your trustee. A good bankruptcy attorney will help you with this process since he/she will be dealing with federal and state laws that vary from state to state. While your trustee will be handling these matters, it’s advisable to keep all documents pertaining to your creditors in your possession. Your trustee will then start the process of selling off your assets in order to pay off your creditors.
Filing for bankruptcy protection should not be carried out in an abrupt manner. Instead you should carry out a systematic approach so as to minimize negative information from entering your credit report. This way you can ensure that negative information won’t prevent you from taking advantage of another loan even after you file for bankruptcy. It is also advisable to get your bankruptcy protected report from a reliable source. This way, you will be able to monitor how the process is progressing and you can check if things are moving according to plan.