Best Ways On How To File Personal Bankruptcy For An Individual

By Paul Sarwana

Filing for personal bankruptcy is a large step that should be given serious thought prior to initiating the process. It is a good idea to have a lawyer involved to help fill out and file all the paperwork, but also to help make the final decision on filing or not. These are the steps for an individual on how to file personal bankruptcy.

Bankruptcy is a legal procedure that someone will take to help them when they are mired in debt that they are unable to pay. By filing bankruptcy a person has the opportunity to remove the debt that they had accumulated but there will be a major impact on their credit report from it.

There are two different types of standard personal bankruptcy, Chapter 7 and Chapter 13. The fact that these two filings are fairly similar is another good reason to ensure that a person filing hires a lawyer to help decipher the differences and how each would impact their specific situation. There is an opportunity to switch filings at the start of the proceedings as long as the person filing meets the appropriate criteria.

The world is seeing many people go through money issues worse than anything seen in recent years. Because of these troubles the number of bankruptcies has increased tremendously. In 2009, 819,262 people filed Chapter 7 and 370,875 filed Chapter 13 bankruptcies. That is a large increase when compared to the 2007 numbers of 413,294 filings of Chapter 7 and 276,649 for Chapter 13. With the amount of people filing both types of bankruptcies it would be important for someone to hire a bankruptcy lawyer to understand and expedite the process.

Chapter 7 is when a person has a lot of debt but not many assets. This is the most common type of bankruptcy filing in the United States. When filing for Chapter 7 a person uses whatever they own to help pay off creditors. There are many debts that will not be written off when Chapter 7 is filed, such as spouse and child support, student loans, and income taxes within the preceding three years.

Chapter 13 is what an individual would file when they are in arrears for a mortgage or car loan. A person needs to have regular income to file for Chapter 13 due to creditors being assigned a payment that is a portion of the person´s future earnings. Chapter 13 is debt rehabilitation for people while Chapter 7 is a form of debt relief.

With the major differences between the two most common types of bankruptcy filings it is important for someone to have a lawyer help them through the decision making and filing process. For many people it will come down to weighing the advantages and disadvantages of each as far as debt and assets are concerned.

As with any legal undertaking the procedure for filing either Chapter 7 or Chapter 13 is time consuming and has a lot of paperwork involved. Failing to correctly fill out or not turn in any of the paperwork would lead to delays or, even denial of the bankruptcy claim. With this amount of work it would be extremely helpful to hire a bankruptcy lawyer that understands all the paperwork and procedures.

With the economic turmoil taking place in the world today many people are facing possible bankruptcy filing. There are two most common types of filings and it is important to make the right decision on which one to file. Having a bankruptcy lawyer available to help with the process will help anyone better understand how to file personal bankruptcy.

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