What Happens When You Declare Bankruptcy?
Kimberly Ann Bastes
What Happens When You Declare Bankruptcy?
Typically, bankruptcy is a last resort financial option for people who are facing serious problems paying their bills. However, there are a few things to keep in mind before you file a bankruptcy petition. Often, a lawyer will be able to help you determine whether filing a bankruptcy is the right decision for you. A credit counselor can also be very helpful.
When you file for bankruptcy, you will have to prepare a petition that lists your assets and debts. You must also include any information about your income and expenses. You will be required to make a plan for repaying your debts. This will detail how much of your future income will be used to pay your creditors. This plan will need to be approved by a court. It may be modified if your situation changes.
When you file for bankruptcy, you are no longer allowed to pursue collection actions against your creditors. This can stop mortgage foreclosure, car repossession, eviction, and garnishment of wages. The bankruptcy will also prevent creditors from taking money from your bank account. Your utilities will also be turned off if they try to shut you off.
If you do decide to file for bankruptcy, you must take a credit counseling course. The course can be completed by phone or online. The course will cost a small fee. If you do not complete the course within 45 days of the meeting of creditors, your case may be closed without a discharge.
If you have a secured debt, such as a car loan or mortgage, you must continue to pay your debt. If you want to keep the car or house, you may have to "reaffirm" the debt. A creditor will agree not to repossess the property until you have paid it off.
You can keep certain types of personal property, including tools of your trade and motor vehicles. You can also keep insurance policies up to a certain dollar amount. Some of your belongings will be protected, including your clothes, furniture, and jewelry. Depending on the type of bankruptcy you file, your home and other assets may be taken away.
The bankruptcy can also affect your credit for years. This can make it difficult to get new credit. Your landlords, employers, and other lenders may be able to see this on your credit report. The bankruptcy can also affect your ability to find a new job. You may not be able to get a new job in the financial services industry or in a government entity if you have filed for bankruptcy.
You can also protect your wages. This is known as an automatic stay, and it will keep creditors from collecting debts. This can also protect you from wage attachments, disconnection of utilities, and eviction. In most cases, your wages will be protected for up to a year. This will also help to relieve some stress. If you are having problems with debt collectors, you should consider hiring a lawyer or a credit counselor.
If you need a lawyer, please call this law firm for a free consultation
Ascent Law LLC
8833 S Redwood Rd Suite C
West Jordan UT 84088
801 676 5505
www.ascentlawfirm.com
