Filing for Bankruptcy
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What Is Bankruptcy?
Bankruptcy is a type of legal proceeding involving a person’s credit, finances, assets, and debt. Basically, the person is granted a "fresh start" if they are experiencing issues with indebtedness. The person can file for bankruptcy and either receive a cancellation of debt (Chapter 7), or they can be granted some time to restructure their finances so they can begin repaying their debt (Chapter 13). Individual persons can file for consumer bankruptcy, but business entities may also file their own bankruptcy proceedings as well.
What Are Some Common Reasons People File for Bankruptcy?
One of the most common reasons people file for bankruptcy is that they are having trouble keeping up with loan payments. This can come from a variety of sources: home mortgage loans, credit card loans, student loans, car loans, etc. If the person is unable to pay the loans back, chances are they will be struggling financially in other areas.
Other reasons for bankruptcy filings include:
- Slow or failing businesses endeavors
- Financial losses after being sued for damages
- Sudden expenses or financial crises
- Changes in employment situation
- Issues with child support or other family law subject matter
What Are Some Tips when Filing for Bankruptcy?
When filing for bankruptcy, you should:
- Be absolutely clear with your financial statements. This can help speed up the process and will prevent instances of fraud or other violations.
- Inform all the parties involved: You will need to make contact with your debtors, mortgagors, and any parties who may be affected by the filing. A lawyer can help you identify which parties need to be contacted.
- Watch out for deadlines: Like any legal proceeding, bankruptcy has its own filing deadlines, which must be followed. Also, there are various eligibility requirements for bankruptcy; not all people are allowed to file.
Lastly, you should keep track of all the documents that are being requested of you during the bankruptcy hearings. This can be a major project, and may require the assistance of an accountant and/or attorney.
Should I Hire a Lawyer for Help with Filing for Bankruptcy?
The average consumer usually requires legal assistance when it comes to filing bankruptcy claims. You may wish to hire a lawyer if you need help with any type of bankruptcy or other financial claims. Your attorney can instruct you on how to file your case, and can provide you with legal advice and representation throughout the entire process.
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Last Modified: 06-23-2014 04:53 PM PDT
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