Security Of Assets
Filing for bankruptcy is one method to resolve your financial difficulties while retaining the majority of your assets. Many individuals fear losing their assets when they fall behind on their payments, but are unaware that they can take steps to secure them. In an effort to preserve these assets, some individuals have resorted to selling or donating their belongings to keep them out of the clutches of creditors. Although selling your assets may be permissible and even advantageous, there are factors to consider regarding the sale of assets and the money received. Transferring assets to family members prior to filing can be considered fraudulent if care is not taken. Before taking the first action, familiarize yourself with your state's ""selling or transferring assets"" laws. In many instances, it is not necessary to sell or give away your assets, as each state's exemption laws specify which assets are secure from liquidation.
The Filing Method
If you have resolved to file for bankruptcy, you must ensure that you have all the required paperwork. In order to determine how to proceed with your case, the courts will require information about your financial situation. First, a petition must be filed with the court. This document contains financial information such as:
List your assets (everything you own or have borrowed).
List all of your obligations (credit lines and loans).
Information regarding bank accounts (savings, credit, retirement, etc.).
Returns for the preceding five years
To maximize the benefits of your petition, it is crucial that you provide accurate and truthful information. Withholding, concealing, or providing false information may constitute fraud and result in the dismissal of your case. Always seek the counsel of an experienced bankruptcy attorney for assistance throughout the process. In addition to ensuring that all of your information is comprehensive and accurate, your attorney can also file the documents on your behalf.
Before your case can be resolved, you will be required to complete a debtor education course after filing the petition. A reputable credit counseling agency will be able to provide you with these courses as well as numerous other helpful resources. An agency registered with the U.S. Department of Trustees will be qualified and authorized to provide these services. There are numerous unreliable credit counseling agencies that can result in frauds and fraudulent practices.
After Your Debts Are Discharged
If you receive a Chapter 7 discharge, you will no longer be responsible for these debts. You will be placed in a ""current"" status with creditors, but it is likely that your credit has been damaged due to delayed payments and past-due account balances. However, you can initiate credit repair immediately. Your credit will be affected less for debts discharged under a Chapter 13 plan because you will have repaid your debts over time. Your credit report will reflect the bankruptcy, but creditors will extend you credit more leniently than someone discharged under Chapter 7.
Regardless of the type of discharge you received, it is essential that you adhere to the guidelines and suggestions outlined in the debtor education course in order to develop successful new financial habits. Insolvency is a privilege that must not be exploited. It is a tool that will give you a fresh start towards recuperating financial control.""
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