When It Is Time To File For Bankruptcy

by | Nov 9, 2013 | Attorney

When someone is in a deal of debt, they want to throw all the bills out the window. That would not help the financial situation, but talking to a bankruptcy lawyer could. Filing for bankruptcy is the closest thing people can get to a fresh start. One of the best parts about bankruptcy is the judge issues an automatic stay. That means creditors must stop their annoying phone calls.

Preparing for bankruptcy is a tough task. Individuals should make a list of all debts, along with the addresses, balances and account numbers. Further, gather any documents that show the value of any property owned, including real and personal. Hire an Attorney when you File For Bankruptcy. Individuals should not tackle the paperwork or process on their own. Almost everyone who files bankruptcy is required to get credit counseling, and there is a fee for the service. It is also a good idea to get a copy of your credit report. Attorney Michael Jankins gives a free one-hour consultation to potential clients at Iowa bankruptcy law.

The attorney will recommend what type of bankruptcy to file. Chapter 7 involves liquidating virtually all of an individual’s assets. The bankruptcy trustee pays debts with the liquidation proceeds. Meanwhile, the lawyer advises the client of a list of property that is exempt. Exemptions vary from state to state. Individuals may not file Chapter 7, if they already received a bankruptcy discharge in the last six to eight years.

Many people who File For Bankruptcy do a Chapter 13. People who file Chapter 13 want to try and repay debt, rather than liquidate assets. Going this route means an individual has a regular source of income. The lawyer and the court come up with a repayment plan, wherein a portion of the income goes to the debts. Individuals may not qualify for Chapter 13 if their income is irregular, too low or if their total debt is too high. Unfortunately, bankruptcies stay on the credit report for a while. However, lenders know you will have a second chance, financially. Many people get offers of new credit, right after filing bankruptcy. Remember the credit counseling, and don’t repeat the same financial mistakes.



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