What To Do Legally If You’ve Gone Bankrupt

 

Ensuring our financial stability is perhaps one of our utmost priorities as a person, but sometimes we have to make the hard decisions in order to ensure we make the most of what we have in any given situation. Sometimes, we get pushed to our limits, and we end up surprised to reach points of no return when we think we’ve planned for what we wanted to achieve. Part of these big decisions is deciding what to do if you’ve gone bankrupt, and this is something not a lot of us get to consider.

Sometimes, when we hear the word “bankrupt,” we tend to think it’s the end of the world. However, realizing what to do legally if you’ve gone bankrupt is perhaps a very important part of your financial stability. This is because knowing what to do as early as now can give us a good idea of our options should we do need to make a move due to bankruptcy.

If you have doubts or questions about your specific financial situation and the specifics of what to do if you’ve gone bankrupt, it’s best you ask the help of a financial professional and a legal professional in order to cover both the legal and financial aspects of bankruptcy, especially in terms of your specific financial situation. If you’re curious about legal processes involved in bankruptcy, it might be a practical idea to find legal professionals that specialize in bankruptcy, such as bankruptcy attorneys here.

Bankruptcy: Who Declares It, and Why?

The common image of a person who files for bankruptcy is that of an individual who may have had more debts than the money for repayments, and is in a situation that wouldn’t let them pay for their debts properly. While businesses file for bankruptcy as well, more people appear to be seeking help on the matter. These are the ones who’ve taken in obligations on their finances such as an auto loan, a mortgage, or a student loan, without having the income to pay for these obligations. Statistics from Debt.org include:

 

  • It appears filers for bankruptcy had $77-billion in assets while having $113-billion in debt (2015).
  • Of the 844,495 cases filed in 2015, 819,760 (a whopping 97-percent) were from individuals.
  • Some people file file bankruptcy as this legally puts people in an “automatic stay.” This doesn’t allow creditors to file lawsuits against the person. Additionally, collection activities are also restricted, such as constant communication, eviction, and wage garnishments.

 

This reality is important to know because bankruptcy definitely is a chance to start over, but a lot of people who file for it tend to be financially restrained because this affects their credit ratings and their ability to use their money in the future.

Bankruptcy: What To Do?

If you want to file for bankruptcy, there are some other legal processes to consider. Before we reap the potential benefits of the concept, such as the reduction, restructuring, or even the elimination of debt, it’s important to of course file bankruptcy properly. This can be done by yourself or with the help of a lawyer. Do remember that regardless of who files and if there’s assistance, there are still filing fees and attorney fees to cover.

 

  • Before filing, however, it’s important to compile all the existing financial records you have and list them. This allows you and the court to understand your full financial situation. These records include expenses, income, assets, and debts.
  • The next step is to undergo credit counseling prior to filing your case. Doing this within 180 days prior to filing is a required step, and you can choose a counseling provider from the United States Courts website. You will receive a certificate upon completion of this course, and must be included with the rest of your paperwork.
  • The next step is the actual filing of the petition, where it’s recommended you find yourself a bankruptcy lawyer. While legal counsel is not exactly required, it’s better to have someone represent you than undertaking the risks of representing yourself. This is especially the case if you don’t know the exact ways a Chapter 13 or a Chapter 7 bankruptcy can affect you. You can also try finding legal services for free.
  • Afterwards, should your petition is accepted, your particular case will be handled by a court trustee. This person meets with your creditors, and you should also be present in the proceeding.
  • If you’re unsure as to just how these bankruptcy policies play out in your financial life, perhaps seeking help from legal and financial professionals, such as those found here, might be of benefit.

 

Conclusion

Bankruptcy is a scary notion, even when we’re just thinking about it.  However, in today’s time where financial stability means being able to understand the ins and outs of your financial status, perhaps knowing what to do legally if you’ve gone bankrupt is still a wise thing to do. After all, understanding what goes on during bankruptcy can not only help you find ways to avoid it, but it can also give you opportunities to deal with it when it arrives. Bankruptcy is a state of our finances we can go back from, and it’s not game over from there.

—————————————————————————————————

Michael Lawson

Michael Lawson is a specialist bankruptcy attorney who has helped many clients in the past move past their bankruptcy. He currently writes for Blclawcenter.com. In his spare time, he likes to enjoy some downtime traveling with his family.

Comments

What Next?

Recent Articles