Before you go ahead with your plans for a bankruptcy filing, certain aspects need serious consideration.
Before filing for bankruptcy, do understand bankruptcy-related laws and requirements.
Self-awareness is a must, even when you are seeking expert legal aid.
A bankruptcy filing is sometimes complicated and confusing.
You must know the rules regarding bankruptcy filing.
Do you know there are different bankruptcy options for individuals?
- The most common among them are Chapter 7 and Chapter 13.
If filed in Chapter 7, he may lose a person’s property, and his debts may get wiped out in three to six months.
Chapter 13 files a debtor needs to make a repayment plan depending on his income and stick to the program.
You can make payments in three to five years.
- Do a detailed investigation: Bankruptcy should be filed only after thoroughly examining your financial documents and carefully considering the situation.
- Avoid additional bankruptcy filing.
- Check eligibility: Every chapter has some requirements and eligibility criteria for bankruptcy filing. You should ensure 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 ensure that your debts address the bankruptcy you’re filing.
- If you file for bankruptcy, you should know what will happen to your property, home, car, or other assets. There are specific 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 provide the wrong information or spend beyond your means.
- Protect your pension plans and life insurance policies from bankruptcy proceedings. State laws protect most of them.
- Be prepared for the invasion in your personal life.
There are a few wildcard exemptions, too; read them here.