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A Simple Guide About What Happens When You File for Bankruptcy

However simple it may be to get some loans from a bank or any other lender, the truth is that certain conditions may make you find it very hard to pay back the debt. The most commonly asked question by most debtors who have a hard time settling the debts is what next for them. Although bankruptcy can be termed as a misfortune and nobody ever wishes to find themselves in such a situation, it is a reality that has already hit the world and the best option is to know what is important for should you find yourself here. Through the article herein, you will learn more about what happens when you file for bankruptcy.

One of the most basic thing that you need to know about is the process and whatever happens in court. The decision about bankruptcy is made in court and this is through a judge and an independent contractor who is hired for this service. Both the judge and the trustee are the ones to review information to discover whether you are worth bankruptcy or not.

It is also important to note that various types of bankruptcy exist just as explained in this website. Among the various types of bankruptcy is chapter 11, chapter 12 and chapter 13 whereas chapter 7 is the most common one. You should also know that chapter 12 is occupation-based occupation-based as explained on this page. As you view here now, you will also discover more than chapter 7 forgives a lot of debts that have no collateral and it also incurs the risk of selling some of the important property that you may own to pay part of the debt.

As a debtor, it is important to know that this process is very long as well as expensive. Remember you will have to meet the credit counselor for bankruptcy and debt as well as putting all the relevant information in place for the process. You should also be at the frontline to show the court that you have made the best effort you could in an attempt to fix the situation.

Normally, the court will come up with plans to have a look at your financial situation before any decisions are made. The whole process of having a look at your financial statements is normally done by the court trustee, the lawyer, and the creditor. You need to note that this process lasts for a long time and can take up to 6 months Above are the important things to know when filing for bankruptcy.

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