Filing bankruptcy or the feeling of being bankrupt nevertheless brings negative emotions of insecurity but there come some times in a debtor’s life when filing bankruptcy remains as the only option. However, the negative effects of bankruptcy on one’s credit report is inevitable; the debtor still has certain possibilities of re-establishing his financial prospects anew as the aftermaths of bankruptcy starts fading with time. When the question ‘how to file bankruptcy’ comes into our mind, an image depicting a gamut of confusing pictures come into our mind and we end up seeking professional assistance from a bankruptcy attorney, who guides and advice us about all the paperwork and proceedings of the same. While filing personal bankruptcy, an individual can choose from either chapter 7 or chapter 13 bankruptcies, depending upon his financial status, income source, future prospects and present economic condition.
The lawyer will help and decide upon which particular kind of bankruptcy has to be filed and accordingly further process will take place. Bankruptcy filing became less easy and unlikely after the introduction of the new bankruptcy laws which says that a person has to be eligible to file for bankruptcy. The eligibility will be decided by a means test and other factors. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires that virtually all debtors receive credit counseling from a government-approved agency 180 days before filing a bankruptcy request. This credit counseling session should last one to two hours and will involve an evaluation of your financial situation, a discussion of alternatives to bankruptcy, and a personal budget plan. This suggests that filing bankruptcy nowadays is not as easy to do as it is to say and this certainly is for the general good and benefit of national finances. If counseling does not provide you with an alternative to bankruptcy, you can choose to file bankruptcy with the help of an attorney or you can represent yourself in bankruptcy court. Be aware that the rules are very technical, and failure to file a required document or making another error may cost you some rights. You may even risk the judge denying discharge of all of your debts. Keep in mind that debtors must list all property and debts in their bankruptcy schedules. Failure to list a debt may mean that the debt will not be discharged. The judge can also deny the discharge of all debts if the debtor acts dishonestly with regard to the bankruptcy case, such as lying or falsifying/destroying records. It is advisable to consult with your attorney and make a list of all documents that you need to produce while filing bankruptcy as the absence of the same will be counted as a major blunder. Also remember that a post-bankruptcy counseling should also be done with the debtor.
While filing bankruptcy a debtor should take care of endless complications and confusions till the process is completely over and the same calls forth for professional help of a lawyer.