Ways & How

how to declare bankruptcy

how to declare bankruptcy

How to declare bankruptcy follows a procedure and starts with a filing.  It can allow for an immediate discharge of the majority or your unsecured debts if approved.  But before you file, there are things you have to seriously consider.  They are the following:

  1. Consult a competent bankruptcy lawyer.  Be honest and open to your chosen lawyer and disclose everything so he can advise you on what’s best to do with your situation.  Ask him all of your questions that come out during the course of your discussion.  It is good to know the pros and cons before you file your case, and he is the best resource person to clarify matters concerning your intention to declare bankruptcy.

  2. Choose what type of bankruptcy you will file.  Your lawyer will advise you on this. That is why it is very important for you to disclose everything to him to avoid technicalities.  For personal bankruptcy, you can choose between Chapters 7 and 13.  Chapter 7 is usually filed when you don’t have any single assets to begin with.



    provide a full discharge of your current debts without the need for any future repayments.  You can expect your property, if you have any, to be sold off or given to your creditors with only your exempt property to be given a pass, this is usually your home.  The only difference with a Chapter 13 bankruptcy is that here a repayment plan is established instead of an immediate discharge.  Chapters 11, 12, 9, and 15 are intended for other types of bankruptcy.

  3. Know when you should file bankruptcy or whether you really should.  Remember that bankruptcy should only be a last resort.  It has serious financial and legal consequences.  You will be considered a high risk when you need to utilize credit resources or buy items on credit in the future.  Chances are you will be charged a higher interest rate.  It will also diminish your options to go into business as it is almost always thought that people who have filed bankruptcy are not trustworthy.  Also, consider if it is the right time because a restructuring of debt can always be negotiated with your creditors, and you can also downgrade your lifestyle for a much-needed savings. Be thrifty and look for other options to earn more. Who knows if after a certain length of time your finances will improve, and declaring bankruptcy can be avoided.

  4. If bankruptcy is really your only choice, then let your lawyer do his work and cooperate fully with him.  Know the fees that you have to pay along with the filing.  A Chapter 7 should cost you approximately U.S. $200.00.  The breakdown is U.S. $170.00 for the actual filing fees and U.S. $30.00 for the noticing fees.  For a Chapter 13, it will cost you less, U.S. $185.00. That is U.S. $150.00 for the actual filing fees and U.S. $35.00 for other fees.

  5. Your bankruptcy lawyer will also charge you a fee.  It should be anywhere from U.S. $1,000.00 to U.S. $2,000.00.  Be ready with this and settle promptly with your lawyer depending on your arranged terms.

  6. Bankruptcy proceedings can last you about six months, more or less.  Be patient as the court will strictly follow the procedures associated with this.

How to declare bankruptcy should be studied well.  Even if you hired a lawyer, you should also know the procedure by heart.  Be prepared for any eventualities as not all bankruptcy cases filed are granted.  This will pass through a screening process.  Just be sure you honestly give all the necessary information and documents as bankruptcy fraud is punishable by law.  Relief from a bankruptcy declaration will be felt when you get a judgment in your favor.

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