It is easy to feel overwhelmed by all the information available on filing for bankruptcy. At this point, you may have read many articles about how, why, and when you should consider filing for bankruptcy. It is important to remember, however, that the number one resource out there for you is a qualified and experienced bankruptcy attorney.
Only an attorney can analyze the specifics of your case and make tailored recommendations that will help you make the best of your legal and financial situation. Even if you are not one hundred percent sure you are going to file for bankruptcy, it is in your interest to consult with a bankruptcy attorney early in your decision making process. An attorney can help you weigh your options, get your finances and assets in order prior to filing, and can make sure that you follow the appropriate filing procedures so that your bankruptcy petition is heard and decided as efficiently as possible. No online article can do what an attorney can do.
However, while you are waiting to consult with a qualified and experienced bankruptcy attorney, here are a few quick questions we often hear, and their corresponding answers.
- What exactly is “bankruptcy?” Bankruptcy is a legal status that a court will grant people or businesses who can no longer pay their debts. Once a court has found you bankrupt, you will be required to liquidate assets and pay back your creditors as much as possible. After that, the majority of your debt will likely be forgiven and you will get a version of a “clean slate” from which to start your financial future.
- Do I qualify for bankruptcy? Whether a court will grant bankruptcy depends on your income, assets, and debts. A court will appoint a trustee to analyze all the details of your finances to determine if you can truly not afford to pay back what you owe. The exact rules that determine if a court will grant your bankruptcy petition are governed by the federal bankruptcy law, as well as the law in your state.
- Do I have to go to court? Yes, you will need to appear in court, likely multiple times. You will also probably be required by the court to meet with a credit counselor at several different points during the bankruptcy process. Sometimes these meetings can be held over the phone.
- Will I lose my house? This depends on the type of bankruptcy that you file and on your personal financial situation. Individuals may file for Chapter 7 or Chapter 13 bankruptcy. Though it is more difficult to keep your house if you file for Chapter 7 bankruptcy compared to Chapter 13, it is still possible if you file for a “bankruptcy exemption” and the exemption is greater than the value of your home. Sometimes, however, selling your home may be a necessary and preferable step to clear your debts.
As you can see, the answers to even these simple questions is not straightforward. To make sure that you get the best result for you and your family from your bankruptcy filing, reach out to a qualified and experienced lawyer today.