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Learn The Basics of Filing a Bankruptcy

Filing for bankruptcy can be overwhelming, but knowing what documents need to be prepared and what steps must be taken can help simplify things. It is crucial to seek advice from an experienced lawyer from the Law Offices of Scott J. Goldstein if you are considering filing for bankruptcy, as they will be able to provide guidance tailored specifically toward your situation.

Filing for bankruptcy can be a challenging and stressful time. But understanding the basics can help make the process easier. 

Here are some of the key elements to keep in mind when filing for bankruptcy:

  • Credit Counseling 

Before filing for bankruptcy, individuals must first receive credit counseling from an approved agency. This will help determine whether debt management is a better option than bankruptcy.

  • Different types of bankruptcy 

There are two main types of consumer bankruptcy – Chapter 7 and Chapter 13. So it is essential to understand which one best fits your situation in order to make the most cost-effective decision.

  • Chapter 7 - This type of bankruptcy involves liquidating assets to pay off debts and is typically used by individuals who have few or no assets to their name. It offers the quickest way to eliminate unsecured debt, such as medical bills or credit card debt.
  • Chapter 13 - This type of bankruptcy involves creating a payment plan for three to five years in order to pay off debts over time – this option is often preferred by those who have steady incomes and want to avoid losing possessions such as a house or car.
  • Documents 

When filing for bankruptcy, you must provide detailed financial information, including income, expenses, assets, debts, etc., so having these organized ahead of time can simplify the process significantly.

  • Eligibility Requirements 

In order to qualify for either type of bankruptcy, specific financial requirements must be met. This includes income limits and other criteria related to your outstanding debts. An experienced attorney can provide advice on whether you meet the necessary qualifications.

  • Court Appearance 

Depending on the type of bankruptcy you are filing for and where you live, you may be required to appear in court during the process. If this is the case, choosing an attorney with experience representing clients during these proceedings is essential.

  • Automatic Stay 

Once your petition is accepted by the court, creditors cannot take any further action against you without permission from them or a judge. This also includes wage garnishments or active legal judgments before filing for bankruptcy protection.

  • Exemptions 

Depending on where you live, certain exemptions might allow you to keep more assets during bankruptcy proceedings, including retirement accounts or student loan debt that might otherwise be at risk if not adequately protected under state laws.

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