Filing for bankruptcy can become a necessary step when you are in debt over your head. It may be because of divorce, job loss, wage cuts or even just the irresponsible use of credit. Bankruptcy can restructure or completely wipe out your debt depending on what type of bankruptcy you file. It is a big decision and not to be taken lightly, but if you decide that bankruptcy is the right decision for you, make sure that you are taking the right steps.
The first thing you need to to is to do some research. Look at the different types of bankruptcy and decide which one is right for you. A chapter 13 bankruptcy is a good option if you have a house and you want to avoid foreclosure. It requires that you participate in credit counseling, and can be converted to a chapter 7 full liquidation bankruptcy if needed.
Chapter 7 bankruptcy is the other option available for personal bankruptcy, and is a complete liquidation of all of your assets, which will be sold off to pay your creditors. Be aware that with either of these, neither child support debt nor student loan debt will be discharged. The only way to get rid of these debts is to pay them.
When you have decided what kind of bankruptcy you are filing, it is a good idea to get a copy of your credit report so that you know exactly what is showing and what needs to be included in your bankruptcy. Once you have acquired your credit report, it is a wise idea to contact an attorney at thie point.
While you can file the bankruptcy proceedings yourself, it is much easier to navigate the system with the help of a competent attorney who understands the legal jargon present in many of the documents you will have to file. Make sure that you list all of your property and debts for the bankruptcy proceedings. Failure to list any property or debts could result in being charged with bankruptcy fraud, and that’s something that you do not want to be involved in.
These are just the beginning steps to filing bankruptcy. From here, you will want to follow the advice of your attorney, and he/she will guide you through the rest of the process. The most important step in any bankruptcy is to remember to not get yourself into the same type of mess again after you have filed. Use it as a fresh start to pay your bills on time, and improve your life.