Also keep in mind the bankruptcy trustee will take possession of and sell any non exempt assets you own and distribute the assets to your creditors. Before you make a decision to file for bankruptcy you should seek counsel from a qualified bankruptcy attorney. Most attorneys will give you a free initial consultation.
There are numerous websites that will provide you with basic information about a bankruptcy filing and help you formulate the questions you will want to ask your attorney at your initial consultation. Some of these sites will provide a personal bankruptcy evaluation for you based on information you provide about your unique situation.
Under the federal bankruptcy law you will be required to obtain some consumer credit counseling with an organization approved by the bankruptcy trustee within 180 days of filing your bankruptcy petition. You may however want to obtain credit counseling prior to filing to ensure you have not overlooked any possible bankruptcy alternatives.
Before your initial consultation meeting with an attorney, collect all the information regarding your income and your debts. Your attorney cannot give you good advice about the advantages and disadvantages of filing a bankruptcy if you do not provide accurate and complete information regarding your financial situation.
Determine after your initial consultation if you are comfortable with the attorney and the answers he or she provided to your questions. Make sure you understand and can afford the attorney’s fee quote. If the first attorney you contact does not provide you with a sufficient level of confidence or if you cannot afford his or her fee try a second initial consultation with another attorney.
Once you have determined that bankruptcy is the best path for you to take you will have to decide if you are served better by filing a Chapter 7 liquidation bankruptcy , or a Chapter 13, repayment plan bankruptcy. Some individuals will be forced to file a Chapter 13 under the federal bankruptcy law if they make more income than allowed under the bankruptcy means test. The means test basically looks at your annual income and if your income is more than the median income for a family the size of yours in your state and if your income exceeds your debt payments your only option is to file a Chapter 13 repayment plan.
Bankruptcy is not a painless easy or quick process. Filing a bankruptcy will have a serious and long-lasting impact on your credit rating. Bankruptcy should only be undertaken if all other alternatives have been considered and eliminated.