Drowning in debt can affect your whole life, from your job to your personal relationships. A bankruptcy can alleviate some of the strain, and knowing what to expect before the process begins can calm you even further. The bankruptcy details described here will inform you about what this process could mean for your present and future.
1. Realize Bankruptcy May Not Erase All Debt
A common misconception from people unfamiliar with bankruptcy is that once you've filed the papers, all your debt is gone. There are a couple of reasons that isn't true. For starters, your lawyer might advise you to file for a Chaper 13 bankruptcy rather than a Chapter 7 one; fundamentally, the difference is that you will be making payments on your debt if you go with a Chapter 13. This could happen if your income surpasses a certain level or you wish to retain some of your assets, such as your vehicle and house.
Another reason that bankruptcy could leave you with some debts to settle is that certain debt is never covered in such a process. One example of a debt that remains after any bankruptcy is a student loan. You must still make arrangements to deal with debts like that.
2. You've Got Classes to Take
Two short courses must be taken in order to complete your bankruptcy. Both can be completed online, and they generally cover financial planning and debt education issues; these classes exist to help you make better choices and avoid bankruptcy again in the future. Your lawyer may suggest doing the first course after your initial filing and the second course before the bankruptcy is discharged, or completed.
3. You Must meet with a Trustee
Every bankruptcy includes a trustee meeting before it's discharged. Such a meeting allows creditors to present their own information and protest the discharge of debt, although they rarely make an appearance. The trustee will ask that you swear the bankruptcy report is complete and ask questions to prove that you aren't hiding assets or have other problems to be discussed.
The trustee meeting is not private. That means many others filing for bankruptcy may be in attendance, as can anyone else who is aware of the meeting. The meeting should only last a few minutes, and should the trustee have any issues with the information you present, your lawyer can assist you in resolving those issues. Your lawyer will also point out things which the trustee may be unaware of.
Your attorney will prep you even more for this process during your consultation. With this information, a bankruptcy is less mystifying and your relief and hope for a new financial life can begin. For more information, contact a bankruptcy attorney.