How To Claim Bankruptcy In The US
One should always first consider alternatives to bankruptcy.
The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act brought in legislation making it compulsory for an individual to obtain credit counselling within 180 days of filing for bankruptcy.
One benefit of counselling is that the individual may find a suitable alternative to bankruptcy that they can implement instead.
There are a number of bankruptcy types (called \”chapters\”), but Chapters 7 and 13 are the most common.
Chapter 7 is often regarded as being the best option. The downside is that most all personal assets have to be sold, including any familly home.
However, after all relevant assets have been liquidated, any outstanding debt (there are exceptions, such as tax), is cancelled, allowing a totally fresh start.
Chapter 13 bankruptcy is completely different however, in that a repayment plan is put in place to repay all debtors, but no assets have to be sold.
Some individuals file for chapter 7, despite having sufficient income to enter into a chapter 13 repayment plan. To ensure that repayment is made when ever possible, the legislation introduced in 2005 requires all applicants for chapter 7 to complete a means test
It is very important to hire a lawyer. They will decide which form of bankruptcy is most suitable for you, and help fill in the BAPCPA\’s means test.
Appointing a lawyer instantly triggers what is called \”automatic stay\” and is a form of protection from creditors in that they can thereafter no longer pursue you directly for payment of debts – they have to deal directly with your lawyer.
You will be required to draw up a list of debtors and a list of your assets. These will be reviewed at the meeting of creditors (what\’s called a\”341 Meeting\”). where you have to answer a series of questions on oath.
In a chapter 7 case, the court decides whether there are assets that can be sold to pay creditors. Once these assets are sold and the money distributed amongst the creditors, any outstanding debts are wiped out.
The situation is different in a chapter 13 filing, in that a 3-5 year repayment plan is introduced to pay off all your creditors, based on the result of your means test.
Under chapter 13, the notice of discharge is served 30-60 days after the repayment plan has been completed and fulfilled. Under chapter 7, creditors can legally challenge the discharge on the 60th day after the meeting of Creditors. If no representations are made, notice of discharge is issued a few days later.
If you are wondering how to claim bankruptcy, I strongly advise that you visit www.howtoclaimbankruptcy.net for more free information, including advice on how to restore your credit score after bankruptcy has been discharged. Unique version for reprint here: How To Claim Bankruptcy In The US.
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