Whenever a person is in state to file bankruptcy, he/she should always be aware of its advantages and disadvantages. The best option to file bankruptcy for a person to file bankruptcy is to hire a lawyer that can deal with the court proceedings. There the two most common ways that a person can file bankruptcy those are chapter 7 bankruptcy and chapter 13 bankruptcy. In chapter 7 bankruptcy, all the non-exempt assets of the debtor are liquidated and the amount that has been collected is distributed among the creditor. Whereas, in the chapter 13 bankruptcy the debtor does not have to liquidate its assets rather than the debtor himself pays the debt back in installments for the time period of 3-5 yrs.
While filing bankruptcy the debtor has to follow some steps and go through certain court proceedings. Some of the steps that can be followed are:
Submission of Petition
The first step for the debtor is to fill in the bankruptcy form in which all the details of debtors are to be mentioned like personal information, information about the finances, assets, unsecured debts, secured debts, creditors, taxes etc. After filling all the relevant information in the form it will serve you as the bankruptcy petition. The debtor is required to submit the original as well as the copies of the form in the states local court and keep one copy for your reference. This would be the best time to hire the bankruptcy lawyer as he can suggest you about which bankruptcy will be suitable for you to file. If chapter 13 bankruptcy is filed than the repayment procedure or plan has to be approved by the court in order to proceed with this. There are different fees that is been charged depending on the type of bankruptcy that you are filing.
Meeting with the Bankruptcy Trustee
Immediately after filing bankruptcy, the creditors will be sent orders by the court that they cannot claim their debts directly from the debtor from now onwards till one month. After this time period the bankruptcy trustee will call for a meeting with the creditors and the debtors. In this meeting of both the parties’ compromise to a solution than after a certain time period the debtor will receive a notice about discharge of debts. Otherwise if an objection occurs and no compromise is been made between the debtor and the creditor, the judge will have to intervene between and call for further proceedings of the case.