What are the things to expect when you file for bankruptcy?

Have you decided to make the difficult decision to file for Chapter 7? Chapter 7, 11 or 13, otherwise known as bankruptcy is a huge financial decision to make. There are many things to consider when making this decision. It does not come lightly, and you should spend a lot of time in making that final decision. When you have made a choice to file for bankruptcy, there are a few things to prepare for. Yes, you may give up your debts, and you may forfeit a few things. But there are things that do happen before, during and after you file for Chapter 7.


Before filing for bankruptcy

Make an inventory of all your finances. Take stock of what your assets are, who you owe money to, your sources of income, and other kinds of money related things. This inventory is important because the government and creditors will use to check whether or not you truly have the funds to pay off your debts. Depending on your marital status, you may have to include your wife or husband’s financial information too.

You then have to petition the government for bankruptcy filings. This is probably what you have a more clear idea of. You sign forms, fill in sheets and provide agencies with your financial data. This is what your financial inventory will be used for. The bankruptcy court will review your petition and financial data. Once the bankruptcy court has finished reviewing your petition, they will make the decision to approve your bankruptcy petition, and you move onto the next step.

During the bankruptcy proceedings

When the court sets a date for your bankruptcy hearing, it is usually a few months after you first filed your bankruptcy petition. During this period the government will stop creditors from collecting debts from you. You will, however, be expected to appear in bankruptcy court.

Creditors will also hold meetings to discuss your financial situation. They will ask questions and discuss things with the bankruptcy court and your legal representative.  Usually, this takes some to resolve because there are few details that must be hammered out. When it is finished though, and your creditors reach an agreement, you will be released from your debt under certain conditions. If u need any help contact us tax accountant in Melbourne

After your bankruptcy is filed

You will usually have to go through post-bankruptcy credit counselling. This is when an outside party looks over you finances and advises you on how to manage them to pay off your debts and fees. This credit counsellor is usually picked out by your creditors.

Once a plan has been reached with your credit counsellor, and you have paid off your debts following that plan. You are legally released from your debt obligations. As a person, you will finally be given a new beginning as a debtor.

Filing for bankruptcy isn’t easy. It requires a lot of effort, and it isn’t simple to pull off. Hopefully using this article you have a clearer picture of what it is like to go through the process of filing bankruptcy.