Filing for bankruptcy is a worrisome phase of life. You may be worried about and facing anxiety about your financial future. In this scenario, you must consider filing for bankruptcy. The bankruptcy process can be confusing as well as complex such as what it will be like, or how you will survive after this.
It is essential to know the following important aspects about bankruptcy before you make your next move towards a fresh start:
It is a Lengthy Process:
Bankruptcy courts do not operate like other small claims. The bankruptcy case does not end within a day. For individuals who file Chapter 7, the case lasts from 4 to 6 months. Whereas, the time span of cases relevant to Chapter 11 and Chapter 13, the most common bankruptcy chapters take years to reach the conclusion. For instance, Chapter 13 bankruptcy can take 3 to 5 years and Chapter 11 can take 2 years or even longer than that. So, prepare yourself to be determined enough to wait for this long if you want to make a fresh start.
Your Finances become Venerable to Public Scrutiny:
When you are planning to file for bankruptcy, you must know that your finances are going to be open to the public. For bankruptcy protection, you will need to file for bankruptcy schedules which is extensive paperwork. This schedule will enlist all your assets, debts, income, expenses as well as your recent financial transaction. You will also have to attend a meeting with the creditors, where the bankruptcy trustee will ask you several questions publicly in the room. Your creditors will also question you during the meeting. Only under the extreme circumstances, this meeting will be held privately, otherwise, this meeting remains public.
Opening your financial details in a public is the embarrassing and very uncomfortable scenario for many people. So, you to be prepared for being scrutinized financially in public.
You Have to Remain Honest, Completely:
In bankruptcy the most important factor is honesty. The bankruptcy court makes only an honest debtor entitled to discharge of debts. This means you need to disclose every financial detail such as your assets, property, debts, creditors, etc.
In case you hide any detail and dishonesty is found on your part, not only the court will not award you bankruptcy discharge but also you will be entitled to the investigation- being dishonest in bankruptcy is a federal crime.
You Need to Pay Special Attention to Bankruptcy Forms:
A general misconception about bankruptcy is that it is a simple and straightforward process. But the fact is bankruptcy forms are extensively confusing and complex. They contain tricky questions to reveal your financial details. To understand these forms, you need to give yourself time before filing bankruptcy.
Especially, Schedules A through J and Statement of Financial Affairs are the most critical and difficult forms. For this, you will need the assistance of a bankruptcy attorney who will help you understand the complexity of these forms and will prevent you from making a mistake.
Filing for Bankruptcy is an Expensive Affair:
While you are planning to file for bankruptcy, but remember that filing is not cheap. It costs you a substantial amount of money. This amount is subject to the question of whether you hire an attorney or not. The cost of hiring attorney may vary from hundreds to thousands of dollars. The filing fees itself is also substantial. If you file for a fee waiver, the court will grant a waiver on the basis of your income.
Facing a financial strain is a challenge. So, you need to make yourself prepared for dealing with this challenge all aspects particularly when you finally chose to file bankruptcy.