Due to economic crisis, there are growing numbers of people who are seeking
filing bankruptcy as a last resort. Even though it is true that many use
bankruptcy as a means to get out of the mounting debt, at the same time it s not
a light weight issue and one needs to put a lot of contemplation. Filing
bankruptcy means that you will pay off a very small
percentage of or nothing at all toward the debts you owe, therefore the courts will need a detailed explanation of why you won't be able to pay. So bankruptcy filing looks relatively simple, but the entire process will take a long way to get completed.
When we speak of personal bankruptcy, there are two basic types: Chapter 7 and Chapter 13. These are legal proceedings available for a person to cope with a financial crisis. Personal bankruptcy should be filed in a federal bankruptcy court, and the court fee costs you about $160.00. Additionally there are attorney fees.
With Chapter 7 bankruptcy, you should liquidate all of you assets that are non exempt from the bankruptcy settlement. Some household furnishings, automobiles and work-related properties are included in exempt properties. The court will appoints a trustee to handle the liquidation process to handle the non exempt property. The trustee can sell your property to your creditors or turn them it over. Once court discharges your debts then you are debt free. By law, you are allowed to file Chapter 7 once very six years.
A Chapter 13 bankruptcy gives you a chance to keep property, like a mortgaged house (provided there are no liens on it) or a car, as long as you have a steady income. It is a repayment plan to your creditors that is court ordered and approved. With this plan, you could use your future income in order to pay back your debts over a 3-to-5 year period without sacrificing any property. Once you complete the whole payments, your debts are discharged by the court.
You should carefully consider any financial impact that will be forthcoming upon you once you are awarded bankruptcy. You will no longer be eligible for any decent loan program such as home equity loan, credit card and auto finance. Even if you get accepted, you might end up with extremely high interest rates that can put you back into financial hardship over a period of time. Also the bankruptcy history will stay on your credit profile for the next ten years, thus making it very difficult to rebuild a good FICO credit score.
In addition to impact on your credit score, you might also have to sacrifice your belongings as well. Usually the courts will allow you to maintain your primary residence and automobile, but any other real estates or personal properties could be confiscated. As with any other legal issue, bankruptcy filing costs money. You should be able to pay lawyer fees and court costs that are usually high dollar amount on your side. If you can seek an opportunity to plan for Debt Recovery yourself, as you know best about your own financial situation. For most people, filing for bankruptcy is not an easy task whether they hire lawyer or do-it-yourself.
But if you don't know how to file bankruptcy on your own, and don't have enough funding resource to cover high cost of lawyer consultation fees, the next alternative way to handle the matter is to go searching for Free Legal Forms and file bankruptcy yourself online. You could find Legal Forms at stationery or bookstores in your local area. They are also available at most law firms.
One easy way would be to go on the internet for any printable Legal Forms and download. Most popular Free Bankruptcy Forms and documents are available such Acceptance of Collection Claim, Affidavit and Bankruptcy Court Bond by Petitioner. Such a legal form will be a great help to you, as it is always recommended to be prepared in advance when you feel that you would be in a situation of financial danger in the near future.