How Does Filing For Bankruptcy Work

To determine this a judge will first compare your income over the last six months with the median income in your state for a family of equal size.

How does filing for bankruptcy work. Here is how it works. Many lenders will shun borrowers who have filings on their credit reports and bankruptcy can cause a credit score to drop by 200 points. Although a bankruptcy stays on your record for years the time to complete the bankruptcy process under chapter 7 from filing to relief from debt takes only about 3 6 months. Legal counsel is not a requirement for individuals filing for bankruptcy but you are taking a serious risk if represent yourself.

Under this type of bankruptcy you ll be required to allow a federal court trustee to supervise the sale of any assets that aren t exempt cars work related tools and basic household furnishings may. You meet with one of our trustees for a free confidential assessment of your financial situation. It can be completed online or by phone and typically takes at least 2 hours and costs between 10 50 unless you re eligible for a waiver. You may want to consult a lawyer before proceeding so you can figure out the best fit for your circumstances.

The second way is for creditors to ask the court to order a person bankrupt. Bankruptcy will ruin your credit for some time to come. You can learn more about what bankruptcy can do for you by speaking with a local bankruptcy lawyer or for a more in depth explanation of both chapter 7 and chapter 13 bankruptcy see the new bankruptcy by attorney cara o neill. Understanding federal and state bankruptcy laws and knowing which ones apply to your case is essential.

Take bankruptcy course 2. If you need to borrow after bankruptcy your only choice may be a secured loan which requires you to put up some form of collateral. Filing for chapter 7 bankruptcy. There are several ways to file bankruptcy each with pros and cons.

Filing the petition under chapter 13 automatically stays stops most collection actions against the debtor or the debtor s property. Consumers who file for bankruptcy can inflict serious damage to their credit. The first thing the bankruptcy team will do is assess your ability to pay. If your income is equal to or less than the median income you can file for chapter 7.

A chapter 7 bankruptcy can remain on your credit report for up to 10 years. Filing for bankruptcy is complicated and the information provided here is not exhaustive. Advantages of chapter 7. Filing the petition does not however stay certain types of actions listed under 11 u s c.

Chapter 7 bankruptcy also known as straight bankruptcy is what most people probably think of when they re considering filing for bankruptcy. 362 b and the stay may be effective only for a short time in some situations. The more common route is to voluntarily file for bankruptcy. How does filing for bankruptcy work.

Bankruptcy is regulated and sanctions by the canadian federal government and can only be filed by licensed insolvency trustees like our professionals at fontaine associates.