A Simple Guide About What Happens When You File for Bankruptcy
Although in most cases getting some loan is an easy task once you meet all the requirements, paying back the debt may be a big problem to some. The biggest that disturbs most people or businesses that are already bankrupt is the next step to take. 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. Through the article herein, you will learn more about what happens when you file for bankruptcy.
Firstly, you need to drive your attention to whatever happens in the courts before you get to know other things. The decision about bankruptcy is made in court and this is through a judge and an independent contractor who is hired for this service. The two parties will take their time and have a review and finally make a decision whether you are eligible for bankruptcy or not.
Another important point for you to note is the fact that we have very many types of bankruptcy. Some of the bankruptcy types are chapter 11, chapter 12 and chapter 13 whereas chapter 7 is the most common. 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.
Bankruptcy filing is both a long and expensive task. 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.
Normally, the court will come up with plans to have a look at your financial situation before any decisions are made. The whole process of having a look at your financial statements is normally done by the court trustee, the lawyer, and the creditor. It is, however, important to note that this process is not a one-day event and could take as long as several months before any approvals are made. The tips above should give you a clue about what to expect when filing for bankruptcy.