Steps To File Bankruptcy

Some people might consider filing for bankruptcy when they have reached a conclusion that they cannot find any other means of paying their debts

. Always make bankruptcy the last choice for it has negative effects on your future employment, obtaining new credit.

The first step to file bankruptcy is to see that you have no other options to save you financially other than filing for bankruptcy. Try to get accustomed with the bankruptcy law especially the new changes under the BAPCPA effective last October 2005. This will help save you a lot of headaches. Being familiar with the bankruptcy law will help you on how to file your bankruptcy. Under the new law, people who want to file bankruptcy must first go to a credit counseling agency to acquire a credit counseling certificate.

The next steps to file bankruptcy are to know chapter 7, chapter 13 and which type of bankruptcy is more suitable for you. There are basically four types of bankruptcy but you will need to know only just the two most common. Chapter 7 is difficult to file because of the new changes in the bankruptcy law. People who wish to file a chapter 7 will go through a process called means test which will indicate a persons eligibility to file for that type of bankruptcy. The means test is a way the court will know that the person who aims to file for bankruptcy is really someone who has no other way to pay his or her debt. You cannot file a chapter 7 type of bankruptcy if your income is above average according to the state you live in. Prior to October 2005, people who want to file bankruptcy have the privilege to choose either chapter 7 or chapter 13 and most people file a chapter 7 in which all debts can be discharged. Currently, the new changes in the bankruptcy law encourage a person to file a chapter 13 instead, which is a repayment plan. People who have a below average income can only file for a chapter 7.

The last step to file bankruptcy is to know the ways of how you can file bankruptcy. This will help you find out how much it will cost if you do one way or the other. You can try to find the aid of a bankruptcy lawyer to help you file your bankruptcy. This can be very expensive. A key point to remember is to stop using any credit card for payments you might have in filing bankruptcy. This can have a negative effect and will even be used against you in the court that can lead to your debts not being discharged.

You can file your bankruptcy without spending a lot of money in the process. This is called the do it all yourself way. This can be very cheap. To be able to file a bankruptcy that is affordable, you need to do some of the work. Just hire a petition preparer or a bankruptcy lawyer to prepare your papers. To know more about how to file bankruptcy, please visit the website below.

by: Steve

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