Here is today’s 5th day of 30 day credit tips on What is Bankruptcy?
I’ve had several inquiries on bankruptcy and decided to give you some insight into what bankruptcy is in case you are thinking of this as an option.
In the next coming days I will share with you,
- How will bankruptcy may affect your credit score,
- The 4 different types of bankruptcies,
- What bankruptcy doesn’t cover and
- If there are alternatives to filing bankruptcy.
So what is bankruptcy?
Bankruptcy is a legal proceeding which a person who can’t pay for his/her bills and needs relief from their debt. It allows an individual and/or business to restructure their debt to pay it back within a payment plan or have most of it absolved completely. Most of the time the bankruptcy filing stops creditors immediately from trying to collect payments or at least until the obligation has been sorted out according to the law.
All bankruptcy cases are handled in federal courts under rules outlined in the U.S. Bankruptcy Code.
You will compile all of your financial records, expenses, debts, assets, income, etc.
You are required to receive credit counseling within 180 days before filing your case. You must obtain counseling from an approved provider listed on the United States Courts website. This is to ensure you have exhausted every other option possible before filing your case.
You will receive a certificate of completion from the course and this must be part of the paperwork when you declare bankruptcy, or your filing will be rejected.
Then you will file the petition for bankruptcy. It is imperative that you hire a bankruptcy attorney that understands state and federal bankruptcy laws & to assist you as the judge overseeing your case is not obligated to offer you any advice.
You may have the option to free legal service if you can’t afford an attorney.
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