Filing personal bankruptcy will protect you from creditors that you owe money to. Bankruptcy is a new method to gain protection. It takes away your debts so that you start off on a new note with your finances. If you are planning to file bankruptcy then there are certain things that you should keep in mind.
The very first thing that you should do is get in touch with a lawyer who specializes in bankruptcy. Youíll want to be working with someone who knows exactly what is required and what steps you need to follow for bankruptcy. When you first meet with the lawyer make sure that you take along all of your financial papers, including bills that you owe, a verification of your monthly income, and statements from your bank.
Be very clear and forthright in calculating your entire debts, minor ones included. Donít be apprehensive, if the amount you figured as a debt is too high. Both, your lawyer and you need not be skeptical about the declaration. After all you are on the threshold of making a new beginning in your life.
The lawyer will explain the difference between the secured debt and unsecured debt. A secured debt is where your creditor holds some type of secure interest on what you owe until the entire amount has been paid back. Failing to make the payment the creditor can take the collateral such as a car. Whereas unsecured debt is debt that is not secured with interest nor tied to a property.
Some debts can't be cleared even by filing bankruptcy. Such debts are student loans, child support and any back taxes that you owe. So double-check that your lawyer has all the information with him to make a perfect application for bankruptcy.
When you are through with all the required documents stated by your lawyer, your next step would be to file a bankruptcy petition with the court in your proximity. Get in touch with your creditors. Send them notice to inform about your filing the petition. This would make them legally incapable of collecting money from you.
The court will assign a trustee in response to your bankruptcy case. He is liable to contact your creditors and pay their dues. All the proceedings will commence only after all your property, if you own any, is sold off and hence the funds are raised. These funds are spent on repayment of your debts. If the place you live in entitles you to receive a part of the profit made by selling off your property, you would get that. Or you might end up in receiving an allowance for a fixed period of time, in order to restart your life.
Bankruptcy is a long and a tedious process. It may affect your financial outlook for years to come. So make sure that all the papers are intact with you for the bankruptcy process.
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