Over 1.5 million Americans file for bankruptcy each year, according to the statistics of the United States bankruptcy courts. In 2014, 3% of bankruptcies filed were business and 97% were personal. Medical expenses alone are the reason for about 62% of these personal bankruptcies filed in the United States.
What is the first step in filing for personal bankruptcy?
Your first step should be to consult with a personal bankruptcy attorney, which can increase your success rate immensely. In fact, a Chapter 7 success rate with an attorney is over 95%, and Chapter 13 success rate is 55% with an attorney. Your attorney will help you assemble your financial inventory for your bankruptcy case.
Should I file for Chapter 13 or Chapter 7 bankruptcy?
Attorneys will help you decided which bankruptcy chapter is best for your situation. Chapter 13 bankruptcy restricters debts and creates a payment plan, which the debtor then makes a monthly payment in order to settle as much debt as they can with their income. Chapter 7 bankruptcy can discharge all debts, but will require most assets be liquidated to help pay off some of the debt owed.
What is the bankruptcy process going to be like?
Once you have decided which chapter of bankruptcy you will be declaring and have assembled your financial inventory, you will be required to attend credit counseling for a few months before you can send in you petition. After credit counseling, you will either attend a creditor’s meeting where the trustee will reaffirm with you the of declaring bankruptcy and reaffirming a debt, or start making you payments. Lastly, to complete your bankruptcy case, you must attend a post-bankruptcy credit counseling course.
A bankruptcy case can be extremely complicated. Attorneys can help to relieve worry and ensure a better chance of success in your bankruptcy case.