Understanding the Bankruptcy Process

Beware, filing for bankruptcy is a daunting and scary process that no one should take for granted. However, no one should fear it either. If an individual’s debts and assets are important, they should be interested in speaking with an attorney that has dealt with bankruptcy planning on a daily basis.

Why consider bankruptcy?

If there is not much left to save, a person can file for bankruptcy and, thus, start taking steps to get a fresh start on their financial life. Maybe you have tried everything but the damage is too great and after considering all the possibilities, you decide to file for bankruptcy. The decision has been made, however, the work is not over. It is time to start thinking about your financial future.

Determining assets

First, if the filing party’s assets and debts are important, do not hesitate to see a lawyer. Most people who file for bankruptcy get approved in one manner or another, but that does not mean that things will be easy throughout the process. If one’s debts are relatively low, they can consider, as many Americans do, to try and tackle the process on their own.

Avoid the “bankruptcy mills” that seem to offer people bankruptcy services at a reduced cost. These may seem genuine but they very often make mistakes that will cost clients much more than it is worth. It is estimated that more than one million Americans go bankrupt each year.

Older and younger people alike who are in debt due to educational loans are the most vulnerable.

Three kinds of bankruptcies

For individuals, there are 3 types of bankruptcy to choose from depending on the nature and amount of their debts: Chapter 7, Chapter 11 and Chapter 13. One has to be very careful about the actions one takes before filing. In fact, filers will have to declare certain transactions such as closing bank accounts, selling properties, etc.

They will need to report whether he or she has paid off debts in the previous 90 days. This may be a “preference” and the person who has benefited from these payments may, in some cases, be obliged to repay them. Visit www.kanialaw.com for more details.

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