Bankruptcy is a way to get relief from the financial burden when things seem impossible to handle. Many debtors have gained the benefits from this option to get rid of long-standing loans. Even the financial companies don’t bother you once you file for Bankruptcy. You should know that it is a lengthy process and you will have to get Help from a bankruptcy attorney because he will look after everything in a proper manner. You might not have the time or knowledge to manage this process by yourself.
Steps involved in filing for Bankruptcy
It is suggested to understand the procedure beforehand because it will help you make the right decision. Some of these steps are elaborated on below:
Attend the counseling session
After you have decided to file for Bankruptcy and hired a good lawyer, you will need to attend counseling sessions with the credit counseling organization. This organization should be approved by the Government. Your bankruptcy lawyer should be able to assist you with this information.
During this session, your financial standing will be evaluated, alternatives will be assessed and the budget plan will be devised. These sessions are generally paid but if the debtor cannot pay, this fee can be waived completely.
Listing your debts
The court will ask you to provide the details of all your debts. These may be categorized as secured and unsecured loans. Secured loans include home loans, car loans and can be described as the loans to which certain collateral is attached. In these types of loans, the creditor has the security interest. Another type of loan is the unsecured loan, which includes credit cards, personal loans and medical bills. You should give every detail to the court, which you have failed to pay to the lending company.
Discharging your debts
After the court issues a discharge, you are relieved of your liability to pay back to the lending companies. They cannot give you any legal notice to pay you. No collection activities such as calls or visits can be done after the court has issued a discharge. It will be a great relief to the debtor because if any creditor tries to contact you, he will be fined.
Rebuilding the credit history should be your first goal after the bankruptcy has been declared. You may need to wait for some time to get loans from these companies. However, you will get time to start afresh and plan your finances.