Learn The Basics Of Bankruptcy & Types of Petitions
Bankruptcy is a process you may go through someday. Dealing with debts is never easy, and avoiding foreclosure is not possible if you cannot get current payments for secured loans. With bankruptcy, you will have protection through an automatic stay, but you must meet some requirements first.
Before filing for bankruptcy, you should contact a Gilbert bankruptcy law office to get reliable guidance. Financial lawyers can help you get your fresh start in the best way possible. You can also read the information below to learn the basics about bankruptcy, including how much debt you should have.
What Is a Bankruptcy Petition?
The bankruptcy petition is the first of many forms you have to complete when filing for bankruptcy (although the entire process is usually known as a “bankruptcy petition”). When you file for bankruptcy, you must inform all of your financial details through official bankruptcy forms.
The bankruptcy case doesn’t start until you file the petition form with the clerk of the bankruptcy court. These forms are free, and you can download them through the U.S. Courts website.
There are four bankruptcy petition types:
- Voluntary Petition For Individuals: This form is for people filing a case on their behalf.
- Voluntary Petition For Non-Individuals: This form is for business entities that want to file for bankruptcy as a voluntary case.
- Involuntary Petition Against An Individual: This form is for creditors that force debtors into bankruptcy.
- Involuntary Petition Against A Non-Individual: This form is for a group of creditors forcing a corporation into bankruptcy.
Types Of Bankruptcy
The two most common bankruptcy forms are Chapter 7 and Chapter 13 bankruptcy in Gilbert. Chapter 7 is great for people who have debts with credit card bills, medical bills, and personal loans.
If you have non-exempt assets that you wouldn’t want to liquidate, Chapter 13 may be the best choice.
Keep in mind that both types of bankruptcy will stay on your credit report for many years after bankruptcy. But, the period with Chapter 7 is usually longer, so it will remain in your credit report for more years than Chapter 13.
Ask yourself the following questions to know which bankruptcy case is better for you:
- Are my debts mostly medical and credit card related?
- Am I behind on home mortgage and car payments? Do I want to make these up?
- Do I have a co-signer on accounts in arrears? Do I want to have them protected?
- Do my debts include student loans, recent taxes, and child support?
You must also follow the essential requirements. Firstly, you cannot file for a bankruptcy petition if you already filed for it in recent years. If you are filing for Chapter 13 bankruptcy, your total debt must be below USD394,725, and your total secured debt must be below USD1,184,200.
A Gilbert bankruptcy attorney can help you more with your case. Contact one if you consider filing for bankruptcy soon.
How Is The Bankruptcy Process?
Once the court approves your petition, you will receive bankruptcy protection immediately. With that protection, creditors and debt collectors cannot demand payments from you, so the creditor harassment will stop.
A bankruptcy trustee is always assigned. This part of the process will be ready once you finish your paperwork. The trustee determines if you currently have assets that can be liquidated to pay off any portion of the total debt.
Depending on the bankruptcy case, you may be able to keep assets up to a certain value, including your home, vehicles, work tools, and more.
After you declare bankruptcy, you will have to take a credit counseling and financial management course. This course is necessary to file bankruptcy Chapter 7 and get a bankruptcy discharge. Financial courses for this matter usually last from 90 to 120 minutes, and they help you understand your finances better so that you can restore your credit rating.
Contact a Reliable Gilbert Bankruptcy Lawyer
If you are considering filing for any type of bankruptcy, we recommend you contact a trusted bankruptcy lawyer. A great option is Gilbert Bankruptcy Lawyer, a local-owned law office that can help you identify the best strategy to pursue your debt relief. We will guide you through the legal process and help you file your case so you can become debt free! Contact us today to obtain a free consultation.