Important Aspects to Know When You File for Bankruptcy
Whereas the process of applying for some loan can be as simple as meeting the qualifications, situations may arise when you are not able to pay the loans back. The most commonly asked question by most debtors who have a hard time settling the debts is what next for them. Most people and even businesses may never like the discussion about bankruptcy but now that it has already hit some people, you must know some key things about this big threat. You should have it from the beginning that bankruptcy is a legal process and all the proceedings are held in coulearn, you will get to learn more about some key things that you need to know about bankruptcy.
One of the most basic thing that you need to know about is the process and whatever happens in court. Those who play the role of making the decision are the judge and the trustee who is hired for the case. The decision on whether you are eligible for bankruptcy is made after both the judge and the trustee have reviewed information to declare you bankrupt or not.
It is also important to note that various types of bankruptcy exist just as explained in this website. Some of the bankruptcy types are chapter 11, chapter 12 and chapter 13 whereas chapter 7 is the most common. You also ought to know that chapter 12 is in most cases occupation-based occupation-based. You will also get to know that most of the debts in chapter 7 are forgiven and it also entails the risk of having to sell some of your assets to clear part of the debts.
Bankruptcy filing is both a long and expensive task. Remember you will have to meet the credit counselor for bankruptcy and debt as well as putting all the relevant information in place for the process. You should also be at the frontline to show the court that you have made the best effort you could in an attempt to fix the situation.
Normally, the court will come up with plans to have a look at your financial situation before any decisions are made. The whole process of having a look at your financial statements is normally done by the court trustee, the lawyer, and the creditor. It is, however, important to note that this process is not a one-day event and could take as long as several months before any approvals are made. The tips above should give you a clue about what to expect when filing for bankruptcy.