With the consistent decline in the world, and specifically Americas economy, many people are being forced to consider filing for bankruptcy. As such, this article is designed to provide a brief overview of the bankruptcy process.
A simple definition of bankruptcy is when an individual is unable to pay off their debts. These debts can be either secured (by either a car or house) or unsecured (such as a credit card).
To add insult to injury, this legal proceeding is difficult (actually impossible) to complete without the aid of a lawyer. You are actually required to use a lawyer to file bankruptcy (Even if you do not want to).
One of the interesting things about bankruptcy is the fact that you can be involuntarily forced to declare bankruptcy. That’s right; a debt collector can take you to court to collect on outstanding debt.
There are two types (or as they are more commonly know, chapters) of bankruptcy that you should be aware of. Chapter 13, which is become more popular, consists of a court approved repayment plan. The second, Chapter 7, is where the debtor liquidates all of his assets to repay his creditors.
As the law requires you to use an attorney, you must enlist one if your wish to file for bankruptcy. Even if you could proceed without an attorney, you really would not want to.
Previous to the recent bankruptcy law changes, your attorney had a fairly easy time. All he had to do was fill out a few forms and collect his fees. That has all changed. He must now affirm to the court that all of the submitted paperwork is truthful.
As a result of the law change, the cost of filing for bankruptcy has increased. While a lawyer now gets paid more than before, in all actuality, the lawyer is now performing much more work while accepting a larger chunk of responsibility.
As this legal proceeding is very complex and emotionally draining, we highly recommend you contact an attorney sooner versus later.