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4 things you should be aware of when filing for bankruptcy

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Are you deeply in debt and brimming with anxiety while considering filing for bankruptcy?  Filing for bankruptcy is not easy and can take up a lot of your time. Every bankruptcy case is unique and complex. Thus you will need an expert to talk to. This person can give you an idea of how a bankruptcy will affect you, before and after your case.

This article outlines several aspects of declaring bankruptcy, which puts you in a better position of living a life free of debt.

Bankruptcy is not a simple affair

If you’ve not had an encounter on matters of bankruptcy, you’ll most likely think that it operates like a small claims court where cases are completed in a day.  In essence, a bankruptcy case can last for four to six months. 

For others, depending on how complicated the case is, it may last for up to five years. If you are to win your case, you’ll need guidance on the best approach from a bankruptcy expert.

Your finances are open to public scrutiny.

Have you ever been forced to discuss your salary and finances with family and friends or any other business law engagement? How uncomfortable did it feel? Then when you file for bankruptcy, be prepared to have it open to the public.

Upon filing for bankruptcy protection, the law requires that you accompany such an extensive package called the bankruptcy schedule. The schedules list your assets, debts, your recent financial transactions, income, and expenses.  You will be needed to attend a creditors meeting, and during this meeting, a bankruptcy trustee asks you probing questions. During this meeting, any of your creditors can ask you questions. The trustees will try and keep the meeting as decent as possible, but the meeting is held in public and only held in private under extreme circumstances.

Thus, this can be an embarrassing process for some people.

Honesty must prevail

When filing for bankruptcy, you must uphold a high level of honesty. The bankruptcy courts have taken the position that only those honest debtors will be entitled to a debt discharge. That means you list your debts, property, and creditors. If the court discovers that you’ve acted dishonestly, you may lose the case, and an investigation by the FBI initiated.

Bankruptcy forms are complicated.

Ask many people, and they’ll tell you that bankruptcy is simple and straightforward because it is primarily based on forms. However, just like the tax return forms, they are complicated, with a lot of information required. The questions about your financial affairs are complex and comprehensive. Thus, you’ve to give yourself sufficient time to understand before you fill the forms.  Of all these, the most complicated are schedules A and J. Here, you’ll need an experienced bankruptcy expert from a law firm like Bay Legal to help interpret the information and fill the forms appropriately.

Discharge is personal

The ultimate goal when filing for bankruptcy is the discharge of debt.  That means the discharge protects only you.  That means it protects you on your debt but not on a shared one. That means if you’re a co-signer, the lender can still collect debt from other co-signers.

When filing for bankruptcy, you must seek help from an expert who will help you navigate the process and walk out debt-free.