How To Claim Bankruptcy - A Few Pointers

Many people don't know how to claim bankruptcy, here are several steps you need to take to get you started on the right path...

Sometimes our bills just get so out of control that there is absolutely no way to catch up on back payments let alone to pay the new bills that keep coming in every month. No matter how hard you try there is no way to stay on top of all of them. Late fees keep adding up and before you know it you are in jeopardy of losing everything you own. This is more common than you might realize and there are legal safeguards that have been established to help consumers get out from underneath their mountain of debt.

This safeguard is called “bankruptcy” and although it may seem like a drastic measure, sometimes that’s what it takes to see your way out of your current financial problems. Bankruptcy is governed by Federal Law and it is designed to give you a fresh start financially. Unfortunately, over the years it was abused so the government did a revamp of the bankruptcy rules and regulations and it is much more difficult to file bankruptcy since the new rules went into effect in 2005.

Because filing bankruptcy is usually a once in a lifetime event, the average person doesn’t have the first clue as to how to claim bankruptcy. There are several key things you need to think about that can at least get you started on the right path.

Find a bankruptcy attorney! If you can locate a local bankruptcy attorney in your local yellow pages, that might be the most prudent course of action. Bankruptcy laws vary from state to state and some states don’t have laws so federal mandates are observed. If you can’t find an attorney locally who handles filing bankruptcies there may be consumer credit counseling agencies that are able to assist you in filing. Some of them have attorneys on staff or contracted as legal advisors. If you cannot find a lawyer or credit counseling service in your area that handles bankruptcies, a quick online search should yield any number of options you can pursue. Just be aware of the fact that if you use the services of an attorney, he/she will require payment in addition to the court filing fees. If your finances are really tight you might do better with a non-profit credit counseling agency.

Gather all your paperwork! Next you will need to gather all your financial paperwork together. This will include any debts you owe as well as any income you currently have. No debt is too large or too small. They must all be included. The same holds true for income no matter how insignificant you think it is. All income must be reported and if you hold back even the smallest amount it could be grounds to deny your claim. If you have an attorney or are represented by a credit counseling agency they will advise you exactly what you need and will help you line up your documents to present to the court.

Filing Bankruptcy with the courts comes next. Some people choose to file without the assistance of legal representation so it is important that you contact the appropriate court in your jurisdiction. If you use an attorney or credit counselor they will know the steps to take and where to file. People who don’t have any assets to protect often file on their own without professional representation. They are just looking to have their debts discharged in order to get back on track. This type of filing is the most straightforward and is usually filed under Chapter 7.  Other consumers may have real or personal property to protect so they file for Chapter 13 which seeks to protect some of their assets so that they don’t lose everything they own.

Because of the complexities involved in choosing which type of bankruptcy you want to file under, it makes more sense to enlist legal representation rather than making dire mistakes and possibly getting denied. If you can’t afford the services of a lawyer, a good credit counselor will walk you through the steps. It’s more than a matter of knowing how to claim bankruptcy, as you can see, it’s really a matter of knowing which chapter to file under that best serves your personal needs. Professional assistance is always your best choice and help is out there.