Prior to filing for bankruptcy, obtaining legal counsel is the first crucial action. You can either obtain this attorney through a referral or locate a competent bankruptcy attorney through the Yellow Pages. Make an appointment and determine if the attorney is a good fit. Request that the attorney handle your case and assist you in registering for bankruptcy.
The second stage is identifying the type of bankruptcy that must be filed. Chapter 7, Chapter 13, and Chapter 11 bankruptcies are most frequently filed. Numerous individuals file for Chapter 7 bankruptcy, which is generally based on the discharge of all debt, but there is always a possibility that the Debtor's liquid assets will be seized.
Chapter 11 of bankruptcy law primarily applies to corporations and businesses, but sometimes individuals also use it. By recognizing payments and requesting a fresh start, Chapter 11 of bankruptcy law can prevent a person's home from being foreclosed. In the case of businesses and corporations, they must demonstrate the ratio of their earnings to their market obligations. It is up to the court to determine whether or not the company is eligible for repayment.
Under Chapter 13 of the bankruptcy code, the bank requests the debtor to pay a portion of his or her paychecks to creditors in order to help repay the debt. Although a substantial sum is paid and the loan repayment period is also extended.
Regardless of the chapter under which you file for bankruptcy, you will need funds to cover attorney fees and judicial costs. It is regrettable that you take so much time to settle your debts before deciding to file for personal bankruptcy, as this could prove to be a costly decision.
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