Getting The Most Out Of Bankruptcy

July 28, 2011 by  Filed under: Bankruptcy 

If you are significantly in debt and lack the resources to pay your bills you are probably in the process of reviewing your debt relief options. Many honest people end up in over their heads with debt and need help to get them out. There are several options available to help you get out of debt and gain control over your finances. Before you get behind in your payments you can seek advice from a debt solutions company to help you create a budget to keep you on track. If you are only slightly behind in your payments you can negotiate a repayment system with your creditor. However, if you have fallen on tough times and no longer have the income needed to make your monthly payments, bankruptcy may be your best option to resolve your financial situation.

Protection Of Assets

Filing for bankruptcy is one way you can resolve your money problems while maintaining most of your assets. Many people fear losing their assets when they are behind in their payments and do not realize they can take action to protect these assets. In efforts to save these assets, some people have turned to selling or giving their possessions away to keep them safe from the hands of creditors. Although selling your assets may be allowed, and even beneficial, there are some things to consider about the sale of assets and the money received from the sale. The transfer of assets to family members before filing can be deemed fraudulent if you are not careful. Before you take that first step, get to know the rules in your state about “selling or transferring assets”. In many cases there is no need to sell or give away your assets as each state has certain bankruptcy exemption laws that will specify which assets are safe from liquidation.

The Filing Process

If you have decided to proceed with filing for bankruptcy, make sure you have all of the necessary documentation. The courts will want to see information about your financial situation in order to determine how to proceed with your case. The first step is to file a petition with the courts. This document includes details about your finances such as:

  • List of your assets (all property, owned or borrowed)
  • List of your debts (all lines of credit and loans)
  • Bank account information (savings, credits, retirements, pension etc)
  • Tax returns for the past 5 years

It is important that you are accurate and honest on your petition to get the maximum benefit from your filing. Withholding, concealing or providing inaccurate information can be considered fraudulent and may result in having your case dismissed. It is always a good idea to consult an experienced bankruptcy attorney to help guide you through the process. Your attorney can make sure all of your information is complete and accurate, as well as, file the papers on your behalf.

Once you file the petition you will be required to complete a debtor education course before your case can be completed. A reputable credit counseling agency will be able to offer these courses and provide you with numerous other helpful resources during the process. There are plenty of non-reputable credit counseling agencies that can result in scams and fraudulent practices; an agency that is registered with the U.S. Department of Trustees will be qualified and approved to provide these services.

After Your Debts Are Discharged

If you receive a discharge of your debt under Chapter 7, you will no longer be liable for these debts. You will be placed into a “current” status with any creditors, but it is likely that your credit has been damaged due to missed payments and delinquent account standings. However, you can begin repairing your credit right away. For debts discharged under a Chapter 13 plan, your credit will be less impacted as a result of you having repaid your debts over a period of time. Your credit report will reflect the bankruptcy, but creditors will be more lenient in providing you with credit than someone who was discharged under Chapter 7.

Regardless of which discharged you received, it is important that you follow the guidelines and tips set forth in the debtor education course to begin new financial habits that will help you succeed. Bankruptcy is a privilege and should not be abused. It is a tool to provide you with a fresh start towards regaining control over your finances.

The Lee Law Firms aims to help local residents resolve their debt issues and achieve a financially healthy future. They provide high quality legal representation that helps lower monthly debt payments, stop wage garnishment,prevent foreclosures and repossessions, and stop calls from creditors. The Lee Law Firm bankruptcy lawyer in Fort Worth have many years of experience in all aspects of Chapter 7 and Chapter 13 Bankruptcy.

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