How to File Personal Bankruptcy

  

Before you declare personal bankruptcy, there are a few things you should keep in mind. Personal bankruptcy is a serious financial step which you should not take lightly, and you should always look into other alternatives before filing your request with the bankruptcy court. That’s not to say that bankruptcy is not a viable option for many individuals. It just means that you should be careful to make the best decision possible for you and your family.

The first thing you should realize is that there have been some changes to the bankruptcy law. Congress passed a law in 2005 which makes it more difficult (but not impossible) for some people to declare personal bankruptcy. The idea is to make sure that you really are struggling financially and cannot afford to pay your bills before allowing you to file chapter seven.

Chapter seven bankruptcy, by the way, is what most people think about when they hear the term bankruptcy. The point of chapter seven is to try and wipe out your debts without any kind of repayment plan. The new bankruptcy law established a means test which means that you have to go through a more intense process in which you document your income and expenses. If your income is less than the median income for your state, then this test will not apply to you because it is obvious that you don’t make much money.

However, if your income is higher than the median for your state, then you’ll have to go through the means test to prove that you really need bankruptcy. In the end, most people that would have qualified before will probably qualify even under the new law. It simply will create more of a hassle for you and your lawyer, and there are other requirements such as mandatory financial counseling.

If you do not pass the means test, you’ll have to file chapter 13 bankruptcy which creates a repayment plan for the next 3 to 5 years.

Before you declare personal bankruptcy, you should remember that it will have a significantly negative impact on your credit rating (although this might not be your priority if you are really struggling financially). There’s certainly life after bankruptcy, but filing chapter seven or any other bankruptcy is still a serious and difficult step to go through. For more articles like this bookmark www.HowToFilePersonalBankruptcy.info

Author: Josh Ramos

How to file personal bankruptcy is a detailed process, most of which is clearly defined by federal and/or state bankruptcy laws.  Contact a personal bankruptcy attorney in your area for more information and details and how to file personal bankruptcy. 

At one time or another in our adult lives, we may have seriously thought about filing for personal bankruptcy. While the prospect of taking such a drastic step is not attractive, it is reality for many people in today’s world.

One of the stated goals of the federal bankruptcy law is to help the honest debtor get a fresh start in life. How financially over extended are you? Did you encounter something unexpected which had a major financial impact on your life such as a job layoff, divorce, high medical bills, etc? If so, you may be a candidate for personal bankruptcy. But if you are simply “tired” of paying your bills every month and not really financially strapped, you will probably not be approved to file. Yes, you do need the approval of the federal bankruptcy judge in order to file.

Also, what debts are you hoping to discharge? There are certain kinds of debts that cannot be discharged via bankruptcy, even if you get approved to file.

A personal bankruptcy case is begun by filing a petition. Something else that has to be filed is a statement of your assets and liabilities as well as a listing of your creditors. You are strongly encouraged to get legal help when filing for personal bankruptcy. Few people can understand the legal jargon in the current bankruptcy laws. There are many examples of this. Do you know what chapter of bankruptcy to file? That depends on your personal and financial situation. One way, your debts are reorganized and another way they are erased, but you may not be approved to file both ways. If you are married, should you declare personal bankruptcy for just yourself or should you file jointly with your spouse? These types of things make a huge difference in how you will end up after you have filed.

There are so many new rules and regulations when you go to file personal bankruptcy that you have to attend a class before you can start proceedings. Even though the majority of people filing are not doing so because of financial mismanagement, the law still says that they must attend credit counseling sessions. Even if you are a financial wizard, this is still a requirement.

Don’t think you will lose your house just because you declare personal bankruptcy. Whether you keep it or not is determined by the specific exemptions that are available under your state law. Even though all states are bound by the federal laws, the laws concerning bankruptcy vary slightly from state to state. But you must file in the state in which you reside, you cannot file in another state just because they have more favorable laws for your situation.

Before deciding whether personal bankruptcy is what you should do, you absolutely need to explore any and all alternatives to bankruptcy. Certainly you do not want to have bankruptcy the first choice on your list. Go and consult with a lawyer and allow him to give his opinion as to what you should do.

Personal bankruptcy, is a choice that you will have to explore and consider based on your circumstances, compared with what alternatives may be available. Your best bet would be to get a bankruptcy evaluation from a qualified attorney to get their advice and recommendation for your best course of action. Remember, these types of people deal with bankruptcy every day and are much more familiar with your options.

Author: Jon Arnold

Article Source: http://EzineArticles.com/?expert=Jon_Arnold

How to file personal bankruptcy includes a consultation with a personal bankruptcy attorney in which he or she can inform you on whether or not your bankruptcy would “pass” a means test.  Discuss this with your bankruptcy attorney if you have questions, and ensure that you fully disclose all of your financial information accurately and honestly to best assess whether or not your situation qualifies for a chapter 7 bankruptcy.

When filing for Chapter 7 bankruptcy, your application will be subject to a means test to ensure that you qualify for this type of bankruptcy. While the means test can be quite involved and complicated, this brief article outlines the process that the courts undergo when determining your eligibility for Chapter 7 bankruptcy.
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How to file personal bankruptcy is fairly straightforward, and your personal bankruptcy attorney can walk you through each one of the steps along the way to getting your debt discharged.  Ensure that you have first exhausted every single option you have in resolving your debt on your own and avoiding bankruptcy.  There are alternatives to bankruptcy, and your attorney should share those with you, or you can discuss them with a financial planning professional.

When you decide to file bankruptcy, you must complete a few steps in order to set the wheels in motion so you can complete the process and eventually have your debt cleared up. Below is a list of the steps you need to complete.

1. Find an attorney you trust – Choose an attorney you are comfortable working with and one who has experience in bankruptcy law.

2. Decide which type of bankruptcy you want to file – Remember you can choose between Chapter 7 and Chapter 13 bankruptcy. Talk to your attorney in order to determine the best choice for your situation.

3. Complete the credit counseling course – As part of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA of 2005), all bankruptcy filers are required to complete an approved credit counseling course within six months of filing. Your attorney can steer you towards possible courses in your area or online.

4. Complete the filing paperwork – By far, this is the most difficult portion of the process for you. You will have to complete forms about your income for the last three years, your monthly expenses, all of your debts and creditors, a list of all of your property — including clothes, electronics, etc. — and your employment. You will also need to provide documentation, including tax returns for the last three years, the latest pay stubs, copies of your expenses, and more. Make copies of everything you submit because the law office can lose your paperwork and you will not want to fill out those forms again.

5. Pay the filing fee – At the time you submit your paperwork, you will also be expected to pay your filing fee.  You may also have to pay all or some of your attorney fees at this time. Those fees vary but should be spelled out for you before you submit your paperwork.

6. Wait – The next steps will be handled by your legal representation. The forms you submitted will be reviewed and you may be contacted for clarifications or additional documentation. The legal secretary will use the information to type up the court papers. Depending on how busy your lawyer is, this could take two to six weeks. Ask for an estimate when you submit your paperwork.

7. Repayment Plan – If you’re filing Chapter 13, you may have to submit a repayment plan or create one in conjunction with your attorney. This will need to be submitted with the rest of your paperwork to the courts.

8. Sign – You’ll receive a call from the attorney’s office when everything is typed and ready to submit. At that time, you’ll need to make the trip to the office to sign all of the documents before they can be filed with the courts.

9. Court date – A court date will be set for your case and you will need to be present. Your creditors are also notified and may attend as well. You will be asked questions by the trustee who will decide whether to approve the bankruptcy or make changes.

10. Discharge – When the case is officially finalized, this is known as discharge. Chapter 7 bankruptcies are discharged 60 days after the meeting with the trustee unless one of your creditors takes action against you. Chapter 13 bankruptcies are discharged up to 60 days after the final payment is made — usually within three to five years.

Author: Paul Sarwana

Article Source: http://EzineArticles.com/?expert=Paul_Sarwana

How to file for personal bankruptcy can be complex and complicated, as your state bankruptcy laws may actually differ from federal bankruptcy laws.  Contact a personal bankruptcy attorney in your area for more information and to ensure that you have legal counsel and representation for the bankruptcy process.

Furthermore, you should evaluate the first steps of bankruptcy, to truly think through the variety of issues that you may be currently facing, or could face if you decide to file for bankruptcy.  In addition, you should do the basic steps of preparing for a consultation with a personal bankruptcy attorney to truly and clearly evaluate your current financial situation. 

If you go through your finances with a fine tooth comb, you may find that you have alternatives to bankruptcy and can avoid bankruptcy by rebudgeting, working with your creditors and resolving many of your financial issues on your own, or with a financial planner or trusted banker.

Bankruptcies are a legal systems of shielding electorate from dire finance circumstances. Present federal bankruptcy law helps ensure that voters of the country can employ a legal plan to beat their money issues and do something to handle non-payable liabilities whenever their situation gets beyond control.
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Making the decision to file for bankruptcy may be one of the biggest, most important and most difficult decsions you make in your life.  How to file personal bankruptcy is actually the fairly “easy” part, as it is a legal process that is dictated by federal and/or state bankruptcy laws.  However, how to handle the emotional factors, the financial factors, the ethical factors and other factors can be far more complex, and don’t always have a cut and dry process that you can navigate. In fact, for most of the “personal” side of personal bankruptcy, you will have to be strong, be confident in your decision and have a great support network around you like your spouse, or even friends and family, if you wish to disclose your decision with loved ones.

In an earlier post, I wrote about some of the first steps to bankruptcy that you need to think through and walk through before making the decision to move forward with your bankruptcy.   After reconciling those issues, you will need to make contact with a personal bankruptcy attorney to set up your initial consultation.  Most personal bankruptcy attorneys will offer a free consultation, you need to come prepared to make the most of this free information. 

Also, remember, the only way to truly make the attorney/client relationship work to your benefit is to be honest and detailed.  First of all, you need to be honest with your attorney about your debts and assets as you could face fraud charges if you do  not fully disclose your information accurately to the court.  Secondly, your attorney is your advocate, and you need to give the honest and clear picture to your attorney so they can best counsel and represent you.  Lastly, this is not the time to feel ashamed, or guilty in some way that you have found yourself in this situation.  This is the time to take action, and honest and clear action is the way to get you a fresh start.

Here are some steps in how to best prepare for your consultation:

1.  You should have your last two months of paystubs, or more if you have had a recent salary change, change in income due to downsizing or job change.  You need to be able to assess your current salary or wages, if they have fluctuated recently, and what you anticipate your income to be in the near future.  Your income must include every source, including any side businesses or other income streams.

2.  You should have your last two years of income tax returns. 

3.  You should bring in a file of organized statements of your debts, or a spreadsheet if you currently manage your debts on a spreadsheet program.  I would recommend having your statements divided up as:

Home ownership debts, like your mortgage, second mortgage, rent, etc.

Car payments or leases

Credit card debts

Business debts, if you are a small business owner

Student Loans

Medical debts

Miscellaneous debts, if you make payments on a boat, RV, etc.

You will need a clear picture of what your minimum monthly payments are, what your outstanding balances are, etc.  You should be able to demonstate clearly if and how you are unable to manage the total of those payments.  This is where often consumers need to dig deep, deal  with all of their debt in the light of day and honestly face the facts.

I also recommend that you have them specifically divided up as you will need to speak to the debts that are related to items that you need to survive, like your home, or your car.  The other debts you may have to live without, and you may actually have to relinquish those items.  You will most likely have to walk away from those credit cards, and depending upon the bankruptcy laws of your state, you could stand to lose a boat or another luxury type item on which you still owe money.

4.  You should have a spreadsheet or some kind of statement that lists your key and significant assets.  Your assets may include:

Equity in your home(s)

Vehicles you own outright

All bank statements with current balances

401k and other investment accounts

High value art, jewelry, antiques, high end fashion accessories, etc.

Timeshares or other vacation-type memberships that you pay each year

Additional vehicles, “toys” (such as RV, motorcycle, ATV, boat, jet ski, etc.)

Fractional ownership of any large ticket items such as a jet, plane, boat, timeshare, etc. 

Trust funds, family trusts

In many cases, many consumers do not have high ticket assets to disclose, however, you should do your best to be honest and specific.  You do not want to run the risk of any kind of disclosure in the bankruptcy process that could look fraudulent or otherwise. 

5.  You should also have a file that details your monthly utility payments and other reasonable monthly expenses.  Again, creating a spreadsheet of what you pay for groceries, gas, utilities, medical expenses, insurance expenses, clothing, etc. is important information for you and your attorney.  Adding your basic monthly expenses to your debt load will bring a clear picture to you and your attorney regarding a potential bankruptcy.

6.  Have a file that includes any other obligations and payments that you make, to include:

Child support

Spousal support

Taxes, if you are on a payment plan with the IRS or pay your taxes on any other schedule

Payments for personal loans from family and or friends

The bottom line is that once you have cleared the hurdle of the first steps to bankruptcy, it is time to get to the honest and brutal facts of your finances.   Let’s face it, all too many consumers juggle there expenses and income from month to month, not always really realizing what goes into each and every expense and dollar that they spend.

And, truly, if the brutal facts of your financial picture is overwhelming, unmanageable and making you literally and figuratively sick, bankruptcy may be your only options.  There are alternatives to bankruptcy, and you may be able to avoid bankruptcy, and with the most detailed information you can provide to your personal bankruptcy attorney, you can figure out truly what the best option and decision is for you, for your family, and for your financial present and future.   The past is just that, the past.  Focus on the future to create the path on how you are going to move forward.

Discovering how to file personal bankruptcy is not nearly as difficult as making the final decision to actually do so.  Consult with a personal bankruptcy attorney to ensure that you are making the right decision for you and your financial situation.  There are alternatives to bankruptcy, and you may be able to avoid bankruptcy.  Sorting through the facts, and trying best to remove the emotional factor, with a personal bankruptcy attorney is the best route to making a sound decision.

Bankruptcy is not something done on a whim but is a very serious financial consideration and decision. Understand how to file bankruptcy so that the outcome as determined by the court is something that you can live with, instead of potentially putting you into an even worse situation.
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How to File Personal Bankruptcy offers the following information and thoughts about filing for personal bankruptcy.  Currently, approximately every 30 seconds there is a bankruptcy filing in the US, so you are not alone.  Contact a bankruptcy attorney in your area for more information, and for how your state’s bankruptcy laws may differ from federal bankruptcy laws. 

If you are planning to file a personal bankruptcy to revamp your financial encumbrances, make sure you are well aware of all the legal implications involved in the process. Once filed, a personal bankruptcy form discharges all your debts to the creditors and helps you make a new beginning once again. However, unlike what most people usually believe, a personal bankruptcy does not emancipate all debts. It also does not release you from taxes that you owe to the state or the federal government. For instance, the burden of some specific loans, such as the secured student loans, remains on you even after filing a personal bankruptcy.

The best thing about filing a personal bankruptcy is that it relieves you from all your ‘unscheduled debts’, such as the credit card bills, money owed to car-loan lenders, overwhelming medical bills, and foreclosures. Good news is that along with the Chapter 7 bankruptcy that you file for yourself, you can also simultaneously file a Chapter 11 Bankruptcy for your business. However, as these cases usually get a bit problematical, it is wise to hire a good Bankruptcy Lawyer for an appropriate legal advice.

After filing a personal bankruptcy, it is quite natural to feel relieved. However, it is very necessary to avoid any credit as far as possible in future in order to keep the credit report clean and avoid the so-called ballooned interest-rates in future. If you feel that soon after filing a bankruptcy, you should repair the credit score to lower the interest rates, it is better to rethink for a while. This sort of a belief can get you into big trouble once again as credit cards and loans that are taken to keep the credit score high will put you back into debt and can lead you to a second bankruptcy just to make your situation even worse in future.

Author: Eshwarya Patel

Article Source: http://EzineArticles.com/?expert=Eshwarya_Patel

How to File Personal Bankruptcy and Taking Your First Steps