If you are thinking of filing for bankruptcy, you have a lot of choices available. There are various types of bankruptcy, including Chapter 7 (liquidation), Chapter 13 (debt repayment plans) and Chapter 11 (business reorganization). You may want to consult with a bankruptcy attorney who can help you determine whether Chapter 7 is right for your situation and what type of debt relief option is best for you.
The Most Common Debts Discharged in Bankruptcy
In a Chapter 7 bankruptcy, most unsecured debts are discharged. This means that you will no longer owe the money and the creditor will no longer be able to pursue you for collection. This includes credit card bills, personal loans, medical bills and many other debts.
The Most Common Debts Not Discharged in Bankruptcy
Some debts are not discharged, such as student loan arrears and certain taxes. A court may also refuse to discharge debts that have been fraudulently created or incurred through intentional misconduct. However, in most cases, the debts are either fully discharged or creditors have a hard time convincing the court to object to their discharge.
You should be prepared to file a lengthy and complex set of forms and documents when you file for bankruptcy. You will need to provide recent pay stubs and tax returns, as well as a list of any property you own or had within two years before the bankruptcy filing date.
A bankruptcy trustee will review these documents and other information, and you’ll also have a creditor meeting to discuss the financial status of your case. The trustee will also look at your assets and decide whether they can be liquidated to repay a portion of your debts.
The process takes about four to six months. During that period, you will have to attend monthly meetings with your lawyer and the trustee, and the trustee will ask questions about your financial status.
Your bankruptcy will not appear on your credit report until the court dismisses or discharges your remaining debts. This can take several months or even a year or more, depending on the type of debts you have.
There are certain things you can do before you file to help make the bankruptcy process go more smoothly and quickly. One of the best ways to prepare is to stop making new charges on credit cards, especially those that are not in good standing, and to pay off any outstanding balances before filing.
It’s also a good idea to try and catch up on any missed rent or car payments before filing. This will help prevent any potential delays in the process.
Filing for bankruptcy is a huge decision, and it’s important to get the best representation possible. Having a reputable, experienced bankruptcy lawyer can be the difference between a successful case and one that doesn’t work out for you.
If you are struggling financially, a Phoenix Arizona Chapter 7 bankruptcy attorney can help. If you are unsure of whether bankruptcy is right for you, a free consultation with an attorney can be a great way to get the facts and make a more informed decision.