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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. One area of concern once you realize you are bot able to settle all the debts is the next step that is best for you. 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. Through the article herein, you will learn more about what happens when you file for bankruptcy.

One of the most basic thing that you need to know about is the process and whatever happens in court. The decision about bankruptcy is made in court and this is through a judge and an independent contractor who is hired for this service. The decision on whether you are eligible for bankruptcy is made after both the judge and the trustee have reviewed information to declare you bankrupt 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 should also know that chapter 12 is occupation-based occupation-based as explained on this page. You will also get to know that most of the debts in chapter 7 are forgiven and it also entails the risk of having to sell some of your assets to clear part of the debts.

As a debtor, it is important to know that this process is very long as well as expensive. Remember you will have to meet the credit counselor for bankruptcy and debt as well as putting all the relevant information in place for the process. 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 key participants in looking at your financial statements are the lawyer, the trustee and the creditor. You should, however, have it that the process takes several days or even months and in some cases could go as long as 6 months. With the tips above, you will know all things that are important to you before you file for bankruptcy.