What You Need To Know About Bankruptcy Filings

Bankruptcy filings are on the rise across the country and likely will stay that way for some time. Many people are finding themselves in this situation for the first time and don’t know what to do. This article is meant to be a guide, to help you better understand the process you are facing.

Making the decision to file for bankruptcy is not an easy one. This is often a decision made after months or even years of trying to fight debt on your own and get your head back above water.

At some point, you will come to the realization you are continuing to lose your battle with the debt and get into a worse situation no matter how hard you try to fix it.

You should only decide to move forward with a bankruptcy when you believe you have no other options. While many people think a bankruptcy is an easy out, it will mar your credit for years to come and you will have a tough time cleaning up your credit and making financial institutions (banks and credit card companies) believe you are responsible enough again to give you a line of credit or a loan.

If you have already spoken with consumer credit counseling services and other financial advisors and they have told you there is no option left for you than filing for bankruptcy, it's time to move into the process.

As you start down the path of bankruptcy filings you will need to have all of your financial statements in order. This means any debts you may have, your most recent two tax returns (for the last two years), loan paperwork, and any titles or deeds to real estate or vehicles that you own.

Once your personal financial paperwork is in order, it's time to fill out the proper bankruptcy forms.

Which type of bankruptcy are you filing for? You will have to choose between Chapter 7 and Chapter 13 bankruptcies. In Chapter 7 your debts are cleared out, but your credit rating takes a hit that it could take up to 10 years to repair. In Chapter 13 bankruptcies your credit rating takes less of a hit, but you also must come up with a plan to work towards repaying your debts.

The completed paperwork is to be filed with the United States bankruptcy court in your area.

Once the filings are in, the creditors are told to stop contacting you, while the rest of the bankruptcy details are worked out.

A meeting will be held one month after the filing to give your creditors a chance to meet with you and question the filing as well as any debts they want repaid. Generally, creditors do not show up for this meeting. If they do, there will be negotiation between your attorney and theirs to come to an agreement.

The court will then go over the agreements and the rest of the bankruptcy filing and sign off on it.

While this method should be a last resort, for some people bankruptcy filings are the only choice to get their financial feet back on the ground after they have gotten deeply mired in debt.