Bankruptcy is often a necessary step for financial recovery. The process is not an easy one, requiring full disclosure of an individual's financial affairs to show proof that the request is valid. Because of the detailed involvement of the courts and the heavy documentation required, this legal process demands the assistance of an attorney. Your lawyer will be familiar with all the court requirements and can help you obtain a positive outcome. Before any action can be taken, you'll need to give your lawyer many statements and lists to support your petition.
The purpose of detailing financial affairs is to show proof that bankruptcy is necessary. There are many different types of documents a lawyer will need to petition the court for either Chapter 7 or Chapter 13 filings. You'll need to list all personal property and its value. Examples of this would be cash, all bank accounts, automobiles, furniture, electronics, equipment, and collectibles. The court will also need to see statements of income and expenses, as well as a list of all creditors and balances. All of this information will guide the court in debt relief and help protect you from creditor harassment.
The two most common forms of bankruptcy, Chapter 7 and Chapter 13, require very similar documentation. However, their purpose is very different. Chapter 7 serves to eliminate unsecured debt, such as credit cards and medical bills. Chapter 13 is more of a debt reduction and consolidation plan. If granted protection under Chapter 7, you will be given the opportunity to start over financially. Chapter 13 allows you, through one monthly payment, to simplify your debt by having a court trustee manage all adjusted payments. It also protects against foreclosure of a home and allows for rescheduling of debts, giving the you more time to pay. Although the courts can clear people of many debts, it is important to know that legally derived debts, such as child support, alimony and debts gained from malicious or criminal acts are not absorbed by bankruptcy.
Just like some debts cannot be removed through bankruptcy, many possessions cannot be touched by filing these proceedings. For instance, your primary residence, basic personal belongings, vehicles, and tools of trade are protected from being liquidated. Benefits gained from IRAs, most pensions, workers compensation, disability and unemployment benefits are also not considered. The only exceptions to these are those that exceed a legally allowed value. Homes, automobiles and jewelry are some examples of property that may hold a value too high for you to keep while approved for bankruptcy. Your attorney can help you determine how to manage these values and help you keep valuable belongings.
Financial hardships are devastating. Often, the burden becomes too great to manage. Filing for bankruptcy is a solid solution for these circumstances. However, the laws governing a petition and required disclosure of all financial affairs keeps it from being an easy solution. Legal assistance eases an already stressful situation through knowledge, guidance and support.
Author Resource:-
Stephen Daniels is an acclaimed SEO 2.0 researcher of best practices, products, and services for a wide variety of industries. If you need debt relief in the Detroit area, he recommends A Better Way Bankruptcy. With three decades of collective experience in bankruptcy law, friendly, compassionate attorneys can help you obtain debt relief, stop calls from creditors and get a fresh start.
![[Valid RSS feed]](http://www.articlesbacklink.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
