Guide To Bankruptcy

First of all, you're not alone. Filing bankruptcy is probably one of the most difficult decisions you'll ever make. So, let's make sure you comprehend exactly what filing bankruptcy means and how it will affect your life. The following guide to filing bankruptcy will help you to understand what goes on behind the scenes.

Bankruptcy, as you know, has changed over the last 3 years. In October, 2005 new federal laws made it harder to file Chapter 7 bankruptcy (total liquidation) and instead required you to file Chapter 13 bankruptcy (repay at least partial debt).

When filing bankruptcy you'll probably hire an attorney. Attorneys charge a fee ranging from $1,500 to $2,500, payable up front. Its best if you have all your financial matters organized as this will help the attorney give you advice and, take some of the stress off of you. With today's economy, bankruptcy is commonplace. Most, if not all bankruptcy attorneys are extremely busy, so don't expect explanations or phone calls returned promptly.

Once your list of creditors is known and all required paperwork is done, the attorney will have your bankruptcy petition filed in your county. After the court accepts your petition, there will be a meeting of your creditors, a meeting you must attend. Some, not all, creditors might file an objection to your bankruptcy petition and may bring you to court regarding the balance of your account.

During this process, you are required to receive debt counseling. Also at this time you will be assigned a trustee. The trustee will overlook both the creditors and debtors filings to make sure everything is done properly under the law.

The day you file your Chapter 7 bankruptcy until the day it's done usually takes 3 months, depending on your situation. Chapter 13 bankruptcy means you will be repaying some of your debt; usually a lesser amount with lower interest. So, Chapter 13 bankruptcy can range from 3-5 years to complete.

What should you expect after your bankruptcy is complete? You should know that if you file a Chapter 7 bankruptcy it will reflect on your credit score for 10 years. Chapter 13 bankruptcy demonstrates you're taking some responsibility for your debt therefore your credit score will be affected for 7 years.

Please note: If you file a Chapter 7 bankruptcy you will not be permitted to file bankruptcy again for another 8 years. Also, Chapter 7 bankruptcy does not mean all debt will be discharged. Things like child support, most student loans, and any taxes (federal, state and local) owed will need to be paid by you.

Filing bankruptcy can be a daunting task. Think deeply about all the consequences you'll face, now and in the future. And, in today's world bankruptcy may be the only option. It's not your fault. Most Americans were unaware the economy was crashing. So, this guide to filing bankruptcy should help you to have an idea of what to expect. See if bankruptcy is an option for you. Knowledge is power.

Hi! My name is April. I've worked as a Bankruptcy Paralegal and know how things work. I have written this article to show you how to avoid bankruptcy. By going to my website, you will find more information and bankruptcy statistics. Please check out my website at http://www.savemoneysavetimenow.com

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