You have been pushed to the brink of economic ruin. Your future involves a view of remaining impoverished by debt far into the latter portions of your life. Everyday brings new financial bad news to your mailbox and telephone. You can feel the noose of financial bondage tightening around your life.
You need help. Short of a rich relative choosing to just pay you out of debt, bankruptcy looms as your only option. Because few people openly discuss their bankruptcy experiences, you are not sure how to proceed.
The first step toward filing for bankruptcy is to locate an attorney. Bankruptcy is not considered a difficult thing for a lawyer to handle. Many of them see bankruptcy as their bread and butter. The billing is good. The procedure is almost the same for everyone. The only trick is to find an attorney that you can somehow afford to pay for the service. Bankruptcy can cost anywhere from $500 to more than $2,000.
You will need this money up front. Shop for the cheapest lawyer in your area with a reasonable reputation. The complexity of your filing will affect the cost a little. For most filings, attorneys have a flat rate for all comers.
You will be asked to build a portfolio of assets and liabilities. This will be to prove that you have significant debt and no realistic way to repay it. Many times, the interest and penalties start to escalate faster than you can make payments. Bankruptcies are usually handled in Federal Court. This means that the standards do not vary much from state to state.
In your portfolio will be copies of the statements showing all of the debt that you desire to discharge. You do not have to discharge all debt. For example, if you want to keep your house, you can leave your mortgage out of the process. You may have a personal debt to a close friend that you plan to repay. Generally, you want to exclude as little as possible so that you come out as debt-free as you can.
Bank statements and documents proving income for up to six months are required. Tax forms going back at least a year or two are needed. All bank accounts and holdings are to disclosed. Failure to disclose assets may jeopardize or delay your bankruptcy ruling.
Your attorney will document everything that you need for a successful hearing. He or she will also file all papers and notify you of your court date. You will also be notified by the court. Once the bankruptcy filing is made, your creditors must back off on collection proceedings or risk legal penalties. They have a right to appear at your hearing and protest the bankruptcy, but they are seldom make a difference.
Notices will be placed in local newspapers announcing that the bankruptcy in pending and inviting creditors to appeal. This is the part where bankruptcy can be embarrassing. Friends, family, and associates may see your name in print. You will just need to swallow your pride and move forward. Once the bankruptcy is completed, you will be free of the debt and able to rebuild your pride and your life.
The bankruptcy hearing itself is somewhat embarrassing. You are ushered into a room with a gallery filled with other bankruptcy filers. They are allowed to sit and listen in as your personal financial situation is discussed by the court. Sometimes laughter and jeers erupt when people have problems answering some of the tough questions or fail to fully understand what was asked. It can be humiliating.
The hearing typically lasts about fifteen minutes or less. You will be informed that you will receive your debt discharge letter in about eight to ten weeks. For most bankruptcy filers, once you leave the courthouse, your part is over. When you receive the letter, your financial picture can begin to brighten. During this process, you will have to take or listen to training on how to manage debt and financial matters.
You can only declare bankruptcy once every seven year without having to face legal problems. Your credit will soar fairly quickly after your bankruptcy is complete because of this. The legal possibilities give creditors a reasonable expectation of full repayment of any new debt.
