What to Do When Filing for Bankruptcy
We all try to be prudent in how we spend our money, shunning the desire to spend more than we actually have. Sometimes, though, the temptation is too great.
There are a lot of items for sale that would be good to have. Some of these items may even be necessary to ensure our survival in this world.
It can be easy to justify spending just a little too much in order to get what we want. In these situations, it is best to stick to your budget.
Taking the time to develop a budget and to plan how you will live financially is a good idea for every person. Even the best laid plans, though, can be made useless in a time of crisis.
If you lose your job, you will very suddenly be deprived of the income source that is so critical for you and your family. At that point, it may seem like you don’t have any options.
You may want to consider whether bankruptcy is your best choice. If you do decide to file for bankruptcy, you will need to take the proper steps to ensure that it brings the results you want.
Before filing, take the time to determine whether you have no other choice. There may still be some possible route that you can take which will allow you to avoid bankruptcy.
You should be aware that bankruptcy can affect your credit for 10 years or more after you file. It truly is a drastic step, but, if you feel that it is necessary, you will have to continue the process to the end.
In the case of companies, you will need to file for chapter 7 bankruptcy. This type liquidates the company’s assets, allowing creditors to reclaim as much as possible of the money you owe them.
Recently, though, a means test has been applied to those who file under chapter 7. The test is designed to determine whether filing is absolutely necessary, or if the company’s owner may still be able to pay off the debts.
Individuals, however, do not file under chapter 7. Instead, they file under chapter 13.
Chapter 13 allows for a plan of payment to be established which will permit creditors to be repaid by the filer. If you file as an individual, you may want to consult a bankruptcy lawyer.
Lawyers that specialize in this area have much experience in how to protect you, but still satisfy your creditors. This type of attorney may be very helpful as you attempt to navigate the journey ahead.
When selecting a lawyer, determine how much you will be charged to file. Ask around and try to find the one that will charge you the least.
If you are unable to pay the entire amount for the fee, you may still be able to file. In this case, the lawyer will not be able to collect the remainder of the fee.
Once you have retained an attorney, you should inform your creditors that you will be dealing with them through your legal representation. Eventually, though, you and your attorney will need to meet with all of your creditors in order to begin the filing process.
During the meeting with your creditors, it will be determined whether you have listed all of your debts in their entirety. You should meet with your lawyer prior to this meeting to list out all your debts.
You will be under oath at the meeting. You should be sure, then, that you can truthfully answer all questions concerning your financial matters.
While this entire process is occurring, you should not use any credit cards. Try to use any cash that you have on hand.
Using a credit card when you are filing for bankruptcy can lead to a lawsuit being filed against you by your creditors. Such a circumstance would only add to your troubles.
If you are filing for your company, your lawyer will decide whether your assets can be liquidated and used to pay your creditors. Individuals, on the other hand, usually are required to develop a plan with their lawyers that will allow for the payment of their creditors within three to five years.
Two months after you file, your creditors will have the opportunity to file a law suit against you. Such suits will be filed only in the case that your creditors feel you have not satisfactorily begun the process of repaying them.
Avoiding bankruptcy is always the best plan, but, if you have to file, it is a good idea to follow these steps which have been outlined. Good luck!
Jack R. Landry has worked in field of law for over three decades. He recommends seeking the right Utah Bankruptcy Attorney for your legal needs.
Contact Info:
Jack R. Landry
JackRLandry@gmail.com
http://www.abclawutah.com
