Before you go ahead with your plans of bankruptcy filing, there are certain aspects that need serious consideration. Before filing for bankruptcy, do understand bankruptcy related laws and requirements. Self-awareness is must even when you are seeking for expert legal aid.
Bankruptcy filing is sometime complex and confusing, It is essential that you have knowledge of the rules regarding bankruptcy filing.
Do you know there are different bankruptcy options for individuals?
- Most common amongst them are Chapter 7 and Chapter 13.
If Chapter 7 is filed, then a person’s property may be lost and his debts may get wiped out in three to six months.
If Chapter 13 is filed, then a debtor needs to make a repayment plan depending on his income and stick to the plan. This payment can be done in three to five years.
- Do detailed investigation: Only after detailed investigation of your financial documents and careful consideration of the situation, bankruptcy should be filed. Unnecessary bankruptcy filing should be avoided.
- Check eligibility: Every chapter has some requirements and eligibility criteria for bankruptcy filing. You should make sure that you are eligible to file for a particular bankruptcy.
Read more about bankruptcy chapters and eligibility here
- Some debts like alimony, child support and tax debts are not forgivable through bankruptcy proceedings, neither under Chapter 7 nor Chapter 13. If you want protection, you must make sure that your debts are addressed in the bankruptcy you’re filing.
- You should know about what will happen to your property, like your home, your car or other assets if you file for bankruptcy. There are certain exemption laws on your property that you should know. Chapter 7 bankruptcies protect only certain types of property by exemption laws.
- Bankruptcy may not wipe out your credit card debts if you provided wrong information on it or spent beyond your means.
- Make sure that your pension plans and/or life insurance policies will continue to be protected from bankruptcy proceedings. State laws protect most of them.
- Be prepared for the invasion in your personal life.
There are few wildcard exemptions too, read them here
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