Personal Bankruptcy Basics

: Chris Lee Law Firm

  Filed under: Bankruptcy

 Bankruptcy

In situations where you cannot pay off debts, are behind on your mortgage payments, or are in danger of a foreclosure, you are probably getting several phone calls by mortgage collectors. If you have tried your best and still think that you won’t be able to repay everything, filing for bankruptcy┬ámay be the only viable option left for you. Filing for bankruptcy can decrease your debts or even eliminate some of them, keep those mortgage collectors at bay, and, more importantly, save your house.

If you have decided to file for bankruptcy, it is essential to understand the different steps. Failing to complete even one of them can lead to your case being dismissed. Having an experienced bankruptcy attorney can guide you through the process.

Before Filing

Before you can file your papers with the court, you need to complete a credit counseling session where your situation will be discussed. Upon completion, you will receive a certificate to file your bankruptcy petition. These sessions are with a government-approved credit counselor. They will give you options other than filing for bankruptcy and advice you on how to manage the debt and future expenses. You can call the nearby Federal Bankruptcy Court or visit their website to get in touch with a counselor to help with your case.

You will file your financial statements for your income, debt, and assets to the court, along with the certificate of completion. Furthermore, you need to submit a means test form, which defines your current income level. If your income is too low and it is deemed that you can’t pay back a part of any of your debt, then you qualify to file for Chapter 7 bankruptcy. If your income is higher than your state’s median, then you are eligible for Chapter 13 bankruptcy. Note that the process involves a filing fee as well, which can be exempted in some cases if you do not have the means to pay it.

Once you have filed the case, the trustee assigned to your case by the court will summon a meeting. Here, the creditors can ask you questions regarding your financial status and your plans, if any, of repaying them.

You then have to take a second Debtor Education Course, which will help you understand the basics of budgeting and money management so that you do not end up in a similar situation again.

Completion of Your Case

Based on the information you have submitted, the judge will determine the fate of your case. If he/she deems that you have lied about any information, then in most likelihood, not only will you lose the case but will also be sent to prison for fraud.

If the court approves your petition in accordance with Chapter 7 bankruptcy, certain debts will be discharged where the creditors can no longer make any attempts to collect money from you. In the case of Chapter 13, a repayment plan will be approved, and then you will have to repay the debt over a time set by the court.

To help you with the whole process and get the case decided in your favor, you should seek the services of a professional Plano bankruptcy lawyer.


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