Important Aspects to Know When You File for Bankruptcy
Whereas the process of applying for some loan can be as simple as meeting the qualifications, situations may arise when you are not able to pay the loans back. The most commonly asked question by most debtors who have a hard time settling the debts is what next for them. Most people and even businesses may never like the discussion about bankruptcy but now that it has already hit some people, you must know some key things about this big threat. It is important to note that bankruptcy is a legal process and it involves the debtor and the lender in case of the debtor gas no capacity to pay back all the loans.
To begin with, you need to know how it all happens in court. The whole process of decision-making in court is made through a judge and an independent contractor who is hired for the case. The decision on whether you are eligible for bankruptcy is made after both the judge and the trustee have reviewed information to declare you bankrupt or not.
Another important point for you to note is the fact that we have very many types of bankruptcy. Whereas chapter 7 is the most common type of bankruptcy, we also have others like chapter 11, chapter 12 and chapter 13. You also ought to know that chapter 12 is in most cases occupation-based occupation-based. Although chapter 7 bankruptcy may forgive most of the debts, you may have to sell some of the important bassets that you own to pay the debt.
As a debtor, it is important to know that this process is very long as well as expensive. Remember you will have to meet the credit counselor for bankruptcy and debt as well as putting all the relevant information in place for the process. Be prompt to show the court that you made efforts in ensuring that everything is settled.
Your financial situation is the next greatest tool for the court before a decision is made. The key participants in looking at your financial statements are the lawyer, the trustee and the creditor. You need to note that this process lasts for a long time and can take up to 6 months With the tips above, you will know all things that are important to you before you file for bankruptcy.