The debt keeps piling up while you’re sinking with the feeling of anxiety and worry. The possibility of declaring bankruptcy continues to have greater chances of happening. Declaring bankruptcy can be a very confusing and complicated process. It is important to understand some things about bankruptcy to be prepared if it does become a reality.
Things to Know When Declaring Bankruptcy
- Not a Quick Process
- Finances Reviewed
- Complicated Forms
- Bankruptcy Discharge
- Not a Cheap Process
Not a Quick Process
Declaring bankruptcy is not a quick process. It is important to understand that courts that deal with declaring bankruptcy are not the same as other courts. On average declaring bankruptcy can last at least four months. When declaring bankruptcy if it is classified as a Chapter 13 it can last anywhere between three to five years. A Chapter 11 bankruptcy can start at a minimum of two years and continue to last for a longer duration. If you want to obtain bankruptcy then you must be able to stick out the long process that may or may not occur.
It is important to know that declaring bankruptcy gives fair game for finances to be observed and reviewed. You must be comfortable with talking about financial affairs and mistakes you have made financially during the whole process. At some point you will have to talk with creditors during a mandatory meeting. Questions can be asked by the creditors during the meeeting. Therefore, you need to be comfortable airing financial matters to strangers. You also must be completely honest. It is important to have a clear mind and be able to list all belongings, debt, and creditors associated with your current finances. Being dishonest or missing something could lead to an investigation by the FBI. Further actions by the FBI could delay or cause complications.
The forms when declaring bankruptcy is not necessarily straightforward. It is important to be prepared for complicated forms. Also, bankruptcy forms may ask questions that seem a bit tricky. Don’t let tricky questions make you second guess your answers. Therefore, make sure to give yourself enough time to fill out the forms and digest the questions being asked.
The discharge is a very significant aspect involved when declaring bankruptcy. Generally a discharge indicates that the individual that filed bankruptcy followed what was required under law. Therefore, the individual is relieved from paying any more on the financial debts. For more information regarding general discharge follow this link. Therefore, the discharge will personally only be able to protect the individual filing bankruptcy. It is important to understand that the lender still is able to try to collect debt from co-signers.
Bankruptcy Is Not a Cheap Process
Declaring bankruptcy can cost a great amount. Hiring an attorney to represent you can cost anywhere between several hundred to several thousands. Even with not hiring an attorney the fees associated with the bankruptcy process can add up to a great amount.
Declaring bankruptcy can be a very complicated and time consuming process. It is important to understand the basics to help decrease the amount of stress to follow. For more information regarding bankruptcy follow this link
Managing your finances is one of the most important aspects of your life. When it comes to managing finances, part of this entails evaluating and paying off your debts. While most people are able to easily pay off their debts in a timely manner, there are times when they struggle to do this. If you are struggling to pay off your debts one of the options that you can consider is bankruptcy. With bankruptcy an individual is filing a series of documents that legally declare that they are unable to pay their debts. Like a number of other financial matter, there are certain signs you should look for when you are contemplating bankruptcy. These signs will let you know whether or not it is a good idea and in your best interest to file for bankruptcy. The most common signs you should look for when filing bankruptcy are when you have difficulty paying debts, your assets are less than your liabilities, you are not likely to pay off your debts anytime soon and when the amount of your debt is much higher than normal.
DIFFICULTY PAYING BILLS/DEBTS
The first sign you should look for when looking to file bankruptcy is when you have difficulty paying your bills and debts. If you are in a situation where you lose your job and cannot keep up with debts such as credit cards or your mortgage, then you will likely be in position to look into bankruptcy. Since your loss of income prevents you from paying your debts you may need to look into ways to eliminate or restructure your debt. As a result declaring bankruptcy is a viable option if you have no realistic means to pay back your debt in a timely manner.
ASSETS ARE LESS THAN LIABILITIES
Another sign you should look for when looking to file bankruptcy is when your assets are less than your liabilities. When the total of your assets such as savings, investments, and other property is much less than the amount of money you owe than bankruptcy is something that may benefit you. If you are in a position where the total value of your assets is much lower than that of your debts then filing bankruptcy will likely help you a great deal. The type of bankruptcy you will want to file is Chapter 7 which will give you a complete discharge of all of your debts. Using this form of bankruptcy is ideal if you have no real property and just have lots of debt you are unable to pay back.
UNLIKELY TO PAY OFF DEBTS
When looking for signs of when it is time to file bankruptcy, you will want to consider this when you are unlikely to pay off your debts at any time in the near future. Since creditors want to be paid by a certain time they will usually demand payments on a regular basis. However if you are unlikely to pay back your debts within a reasonable timeframe then you will want to consider bankruptcy. In this situation you will benefit by filing bankruptcy when the amount of debt you have is realistically uncollectable by the creditor. Therefore you will want to file bankruptcy when it is very unlikely that you will be able to pay your debts completely within two years.
DEBT IS EXTREMELY HIGH
For those who are looking to file bankruptcy, you will know that it is time to do this when your debt is extremely high. If your debt is much higher than normal and that it would realistically take many years to pay it off then you will want to consider bankruptcy. When the amount of money you owe is so high to the point where you just can’t keep up with the payments and it jeopardizes your ability to meet your necessary financial obligations, then you will know that filing for bankruptcy is in your best interest.