Most people know very little about the bankruptcy process and have much to learn when choosing to file for bankruptcy. Getting to know the basics of the process can help make an informed decision about whether bankruptcy is right for you.
Preparation is key to the success of a bankruptcy filing. You will be required to provide the court with very detailed documentation of your financial life, including your paycheck stubs, bank statements, prior tax returns, debt account statements and a list of your assets. It is important that you have all of the necessary documentation in order, which is why it is advised that you at least seek consultation from a bankruptcy attorney before filing your case.
During The Process
Once the necessary documentation has been filed, there are several things that will happen. First, you will attend a Meeting of Creditors, in which you will be available to answer any questions over your petition and included debts. Next, you will be required to pay the necessary court fees for your case. The court also requires completion of a credit counseling course in order to receive a debt discharge. If you have filed for Chapter 13 you will be required to participate in the development and implementation of a debt repayment plan. However, a bankruptcy Trustee can perform these duties on your behalf but it is important that you become an active participant in the process.
After A Discharge
Your debts have been resolved, congratulations. Now is the time that requires your utmost attention and focus. Although you may be inundated by credit card offers you shouldn’t act too quickly. It is important that you begin to rebuild your credit, but taking out several new lines of credit is not always the best way to do that. Your focus should be on smart money management skills like budgeting and saving. It is a good idea to obtain one small line of credit that you can use to establish a responsible credit history. You will be best served to avoid any big or secured loans for at least twelve months after your discharge.