Bankruptcy services are an important part of helping you resolve your debts and start building a new financial future. These services include debt analysis, bankruptcy planning and representation, credit counseling, and more.
Bankruptcy can help to eliminate debts that cannot be discharged through other methods, such as reaffirmation agreements or the sale of non-exempt property. It can also reorganize debts to lower your monthly payments and allow you to keep your assets.
What is Bankruptcy?
Bankruptcy is a legal process that can help you get rid of debt and repay your creditors. It is a federal court action that helps individuals and businesses who can no longer pay their bills or meet their obligations get a fresh start.
In a bankruptcy case, a court evaluates the debtor’s assets to decide whether the debtor has enough money to pay some or all of their debts. In some cases, the debtor’s assets may be liquidated (sold) to pay back creditors.
When a person or business files for bankruptcy, they are asking the courts to protect them from creditors who want to collect on unsecured claims. These claims include credit card balances, medical bills and other types of debt.
When the court discharges these claims, the creditors must stop any further legal action or collection efforts. This means they cannot garnish your wages, repossess your car or foreclose on your home. They also cannot cut off your utility service.
Why File Bankruptcy?
Bankruptcy can be a helpful way to get your debts resolved, save your home and keep bill collectors at bay. But, it can also have some negative consequences.
Oftentimes, people file bankruptcy because they have been unable to repay their debts. This can happen for many reasons, including job loss or business failure.
Divorce can lead to additional financial difficulties, as well. A divorced couple may need to pay extra on the mortgage, child support and credit card bills that were not paid during their marriage.
Student loan debt can also be a problem for some individuals. While some student loans can be discharged in bankruptcy, others are not.
Filing for bankruptcy is a serious decision. It can lead to a large blot on your credit record, which can prevent you from getting a job or a loan in the future. So, you should make sure that you understand the pros and cons of bankruptcy before you decide to go through with it.
How Do I File Bankruptcy?
Bankruptcy is a legal process that can help people get their finances back on track. Whether bankruptcy is right for you depends on several factors, including your income and assets.
If you decide to file for bankruptcy, you will need to gather and organize documents that show you can’t repay your debts. You will also need money to pay for fees (for a lawyer and filing).
A financial counsellor can help you decide whether bankruptcy is right for you. The counselor can evaluate your situation, explain alternatives and help you develop a budget plan.
The bankruptcy process can be complex and lengthy, so it’s important to understand the details before you begin.
The two main types of bankruptcy are Chapter 7 and Chapter 13. In Chapter 7, your non-exempt property is liquidated (sold) to pay part of your debt.
What Happens After I File Bankruptcy?
Bankruptcy gives you a fresh start, but it also comes with a lot of responsibilities. Your Licensed Insolvency Trustee can help you learn how to rebuild your credit and build healthy habits around money.
The first step in filing bankruptcy is to file your petition with the court. You can have an attorney do this, or you can fill out forms yourself and submit them to the court.
Once you file, the court issues an automatic stay that immediately stops creditors from trying to collect on any of your debts. It also prevents them from taking legal actions against you or contacting you via email, phone, or mail.
Your Licensed Insolvency Trustee will also attend a meeting of your creditors and answer questions about your financial situation. At this meeting, you’ll be put under oath and asked to give details about your property and finances.