Legal

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Essential Things You Should Know About Filing for Bankruptcy

Although in most cases getting some loan is an easy task once you meet all the requirements, paying back the debt may be a big problem to some. The biggest that disturbs most people or businesses that are already bankrupt is the next step to take. Most people and even businesses may never like the discussion about bankruptcy but now that it has already hit some people, you must know some key things about this big threat. One of the key things that you need to note is that bankruptcy is a legal process meaning that everything is decided in court and it involves both the lender and the debtor.

Firstly, you need to drive your attention to whatever happens in the courts before you get to know other things. Those who play the role of making the decision are the judge and the trustee who is hired for the case. The decision on whether you are eligible for bankruptcy is made after both the judge and the trustee have reviewed information to declare you bankrupt or not.

You will also get to learn that there are very many types of bankruptcy and you can view here to know more about it. Whereas chapter 7 is the most common type of bankruptcy, we also have others like chapter 11, chapter 12 and chapter 13. It is also important that you get to know that some of these types of bankruptcy are occupation-based such as chapter 12. As you view here now, you will also discover more than chapter 7 forgives a lot of debts that have no collateral and it also incurs the risk of selling some of the important property that you may own to pay part of the debt.

Bankruptcy filing is both a long and expensive task. You should always seek to meet the credit counselor for bankruptcy and debt and at the same time assemble all the information that may be necessary for you. Be prompt to show the court that you made efforts in ensuring that everything is settled.

Your financial situation is the next greatest tool for the court before a decision is made. The key participants in looking at your financial statements are the lawyer, the trustee and the creditor. It is, however, important to note that this process is not a one-day event and could take as long as several months before any approvals are made. The tips above should give you a clue about what to expect when filing for bankruptcy.