The first thing you need to know about bankruptcy is that the person filing is not always at fault. In fact, most of the time they’re not. Many of those who find themselves filing for bankruptcy had a great credit history and are very hard working and financially responsible. How, then, do they end up filing for bankruptcy. The number one cause of bankruptcy is medical bills. One unforeseen medical emergency can be all it takes to ruin a person’s finances. Here’s a look at a few other things about bankruptcy many people don’t know.
It costs money to go bankrupt
You might be wondering, “How am I supposed to pay for bankruptcy?” After all, your lack of money is the reason you’re considering bankruptcy in the first place. One option that many turn to out of desperation is filing without legal help. This isn’t recommended as a bankruptcy case can be thrown out due to errors in the filing paperwork. Also, it’s easy to lose property or rights through bankruptcy if you don’t know what you’re doing. A bankruptcy attorney is your best bet for getting the most out of a bad situation.
There are a number of different ways to pay for bankruptcy. You can pay your attorney the necessary attorney and filing fee in installments and file when it is paid. This can work of you are sure you are going to file and you stop paying on the bills that will be discharged. Another method is to plan your bankruptcy at a time when you are coming into a little extra money such as tax returns. You may be fortunate enough to have a family member who can assist you. Even that loan however, will be officially canceled when you file
Court and classes
While most of the bankruptcy process can be carried out by your attorney, you will have to go to a “meeting of creditors.” This is generally not in a courtroom and is conducted by the Trustee assigned to your case. You will be under oath.
Essentially, this is a chance for the Trustee and creditors to ask any questions they may have about your case. If you have few assets, typically no creditors even show up and it ends up being a meeting between you and the trustee. You will also need to take a couple of credit counseling classes. Unlike the meeting, these can be done from home over the internet. The first is a pre-petition class designed to ensure that you’ve exhausted all alternatives to bankruptcy before filing. The second is a post-petition class designed to teach you how to manage debt better in the future.
The bottom line is that bankruptcy isn’t as easy as some people make it out to be. However, if you are prepared going in, bankruptcy doesn’t have to be terrifying either.
It costs money to go bankrupt
You might be wondering, “How am I supposed to pay for bankruptcy?” After all, your lack of money is the reason you’re considering bankruptcy in the first place. One option that many turn to out of desperation is filing without legal help. This isn’t recommended as a bankruptcy case can be thrown out due to errors in the filing paperwork. Also, it’s easy to lose property or rights through bankruptcy if you don’t know what you’re doing. A bankruptcy attorney is your best bet for getting the most out of a bad situation.
There are a number of different ways to pay for bankruptcy. You can pay your attorney the necessary attorney and filing fee in installments and file when it is paid. This can work of you are sure you are going to file and you stop paying on the bills that will be discharged. Another method is to plan your bankruptcy at a time when you are coming into a little extra money such as tax returns. You may be fortunate enough to have a family member who can assist you. Even that loan however, will be officially canceled when you file
Court and classes
While most of the bankruptcy process can be carried out by your attorney, you will have to go to a “meeting of creditors.” This is generally not in a courtroom and is conducted by the Trustee assigned to your case. You will be under oath.
Essentially, this is a chance for the Trustee and creditors to ask any questions they may have about your case. If you have few assets, typically no creditors even show up and it ends up being a meeting between you and the trustee. You will also need to take a couple of credit counseling classes. Unlike the meeting, these can be done from home over the internet. The first is a pre-petition class designed to ensure that you’ve exhausted all alternatives to bankruptcy before filing. The second is a post-petition class designed to teach you how to manage debt better in the future.
The bottom line is that bankruptcy isn’t as easy as some people make it out to be. However, if you are prepared going in, bankruptcy doesn’t have to be terrifying either.
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