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Important Aspects to Know When You File for Bankruptcy

Whereas the process of applying for some loan can be as simple as meeting the qualifications, situations may arise when you are not able to pay the loans back. The biggest that disturbs most people or businesses that are already bankrupt is the next step to take. Even though bankruptcy is never a nice topic for most business and people, it is already with us and the best we can do is to enlighten you on the right step to take should you be a victim. One of the key things that you need to note is that bankruptcy is a legal process meaning that everything is decided in court and it involves both the lender and the debtor.

Firstly, you need to drive your attention to whatever happens in the courts before you get to know other things. The decision about bankruptcy is made in court and this is through a judge and an independent contractor who is hired for this service. Both the judge and the trustee are the ones to review information to discover whether you are worth bankruptcy or not.

Another important point for you to note is the fact that we have very many types of bankruptcy. Whereas chapter 7 is the most common type of bankruptcy, we also have others like chapter 11, chapter 12 and chapter 13. You also ought to know that chapter 12 is in most cases occupation-based occupation-based. As you view here now, you will also discover more than chapter 7 forgives a lot of debts that have no collateral and it also incurs the risk of selling some of the important property that you may own to pay part of the debt.

Bankruptcy filing is both a long and expensive task. You should always seek to meet the credit counselor for bankruptcy and debt and at the same time assemble all the information that may be necessary for you. Always try to show the court that you have tried all that you could to settle the situation.

You also need to know that normally there are plans to have a look at your financial situation as arranged by the court. The whole process of having a look at your financial statements is normally done by the court trustee, the lawyer, and the creditor. You need to note that this process lasts for a long time and can take up to 6 months With the tips above, you will know all things that are important to you before you file for bankruptcy.