Guide to Bankruptcy
What is Bankruptcy?
Bankruptcy is when a person, or even an organization, legally declares that they can no longer pay debt owed to creditors. After the decision is made to declare bankruptcy, either a repayment plan will be set up to help those in debt which is usually a Chapter 13 or assets will be liquidated (or sold) to pay debts which is usually a Chapter 7. In a nutshell, bankruptcy offers relief to those who borrowed too much money and can not afford to pay all of it, or any of it, back.
Who files for Bankruptcy?
Bankruptcy can happen to anyone, whether it is an individual, a married couple, a business, or an organization. Just about anyone can file for it, but almost always certain requirements must be met so in some cases, not everyone will qualify to declare bankruptcy.
How can one file for Bankruptcy?
If a business wishes to file for bankruptcy they must have an attorney, an individual does not lawfully need one but it is extremely difficult to file for bankruptcy without an attorney as they must represent themselves in bankruptcy court. After an attorney is hired, assuming this is the route most people will take, they will provide the information needed such as obtaining the correct legal documents. Many documents are important for filing bankruptcy such as completing a credit counseling course and obtaining a certificate and also providing documentation of any owned assets. Hiring an attorney will put you on the right path for successfully declaring bankruptcy.
When should Bankruptcy be considered an option?
It is extremely important to consider, and utilize all other options before deciding to declare bankruptcy. Credit counseling is available, as well as debt negotiation, and budgeting information. If it is not too late, sit down and figure out why money is not being saved, is it due to wasteful spending or lack of income? If the minimum credit card payments can no longer be paid every month, along with car and house payments, and if no money is saved up in accounts it is time to consider filling for bankruptcy.
More information
For more information on Bankruptcy, such as more in depth detail into the legal requirements, please visit these sites.
Uscourts.gov As this is provided by the United States government it contains accurate and reliable information concerning Bankruptcy facts and laws.
Bankruptcyinformation.com This website can direct you to the specific location you live in to check on specific Bankruptcy laws as they can vary by region.
Usdoj.gov Another United States government site that can provide accurate information on bankruptcy laws.