3 Steps to Determine if Filing for Bankruptcy the Right Option for You

When debts become too much to handle, people generally tend to develop a feeling that they are in a hopeless situation and filing for bankruptcy is the only option left to them. Just because you feel like this doesn’t mean you are at verge of bankruptcy. Haven’t you heard about so many people who file their petition and get rejected straightaway? It happens because their calculation was wrong. So, before you make your move, make sure you do a thorough analysis. Here are the 3 steps that you have to follow for this.

Get Yourself Educated

I won’t ask you to read revamped US Bankruptcy Code to find out if you are eligible for filing for bankruptcy. The original code is very complex; it is not at all an easy task to comprehend everything that you are reading. But, there’s an alternative. Just visit your local bookstore or a library and get those books that have explained everything in brief in simple English. If you show some commitment, you won’t really need a lawyer to educate you about everything. But, if you really think that will help, go for it. Anything that can help you avoid bankruptcy is good.

Bankruptcy Doesn’t Mean Losing Everything You Have (And It Doesn’t Even Necessarily Eat Away All Your Debts)
Chapter 7 is not the only option available to you. It is only if you file under chapter 7 when all your assets (except the ones that are exempted as per law) will be liquidated in settlement with your debts (except those that are not discharged by law, such as student loans, IRS dues, alimony, child support, and others). You have other options available in the form of chapter 11 and 13, where you are allowed to continue with your business while things will be made more favorable by making the repayment terms much easier (such as by cutting down interest rates, waiving off penalties, increasing the loan term and reducing the overall monthly payments). If you are really serious about filing for bankruptcy, choose your option carefully and plan accordingly.

Do Everything Possible to Avoid Bankruptcy

When you do everything possible to avoid bankruptcy and find out that none of your strategies work, it probably means you must start preparing to get bankrupt. No matter which chapter you are filing your petition under, there are certain legal requirements that you need to meet. It is not like you will approach the court with your petition and you will be declared bankrupt straightaway. In most cases, you will have to deal with a 6-month waiting period, during which you will be meeting with credit counselors, negotiating with your creditors, and doing other such things that the laws require you to do. The court will do a thorough assessment after 6 months and then take a decision whether your petition should be granted or not.

Overall, when it comes to filing for bankruptcy, your awareness is the key to make an informed decision.

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Posted in Bankruptcy, Filing Bankruptcy | 2 Comments »

2 Responses to “3 Steps to Determine if Filing for Bankruptcy the Right Option for You”

  1. [...] been collected and is accurate. The bankruptcy court will now notify all the creditors about your filing for bankruptcy. This will make your creditors discontinue whatever action they had intended to take against you in [...]

  2. michael says:

    Bankruptcy or being bankrupt seems to develop a panic and a very hopeless situation. Decision of filing for bankruptcy is a very big issue and any one going for it should always think not only twice but for many times. Do every thing you can do to avoid bankruptcy? Try every possible step you can to get out of this idea. Once you feel to go for it and will be declared bankrupt. It is not as easy as it sounds. It is a long procedure with a lot of legal formalities and court proceedings. If you have finally decided to file a petition for bankruptcy, first step is to educate yourself with all the material present in the library, internet etc. Bankruptcy Attorneys can also be appointed but with a security of their spot less work for you and may provide them with all the documents and proofs like pay slips, cash payment receipt etc. It is very important for you to beware of each and every step and situation.

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