The Basics of Bankruptcy Filings in America Today

Are you deep in debt and you do not know how to escape the debt collection calls and letters? Many consumers across the USA are in the same position that you are in. The best solution to this problem is to file for bankruptcy protection. According to Wikipedia, “bankruptcy is a legal process that is available to people who cannot repay the money that they owe their creditors. This process is then imposed by a court order from the judge.”

How Should I Begin the Process?

Any bankruptcy law firm birmingham al can assist you with your bankruptcy filing. If you have decided to file for Chapter 7 Bankruptcy, then you will need to complete mandatory credit counseling sessions. After this requirement is met, you will need to compile a list of all of your creditors, the account numbers, addresses, phone numbers and balances owed. This list should then be handed over to your legal representative. This will allow him or her to begin notifying your creditors that you will be submitting a petition for bankruptcy. By law, this should stop your creditors from calling or writing you because an automatic stay will be invoked. The next steps involve the possible appointment of a trustee. If you have property, then you may be forced to sell it to liquidate the value so that the money can be distributed between your creditors

What Can My Creditors Do from a Legal Perspective?

The creditors named in your petition will come together for a meeting to determine if the bankruptcy plan is satisfactory to them. You will be asked questions about your financial situation. Legally, the courts do not make it mandatory that all of your creditors sign off on the plan. The bankruptcy can still be discharged if everyone does not agree to the terms put before them.

What Other Procedures Do I Have to Follow?

According to USCourts.Gov,” usually a chapter 7 debtor won’t be called to appear in court and will not go in front of a bankruptcy judge unless someone has made an objection to the petition.” The process is fairly much wrapped up once the trustee has completed his or her duties. The bankruptcy lawyer can help you ensure that the administrative process is thorough so that there are no problems down the road.

What is the Aftermath of the Filing?

A few weeks after your debts have been wiped away, you will have a public record placed on your credit report that will remain there for a period of seven to ten years. This will drastically reduce your credit score. You will also face challenges when trying to apply for an apartment lease, open new credit cards, or apply for new credit lines. It is crucial to stick to a budget and spend your money wisely because you will not be able to file for bankruptcy again for eight years.