What is bankruptcy? Bankruptcy is the legal procedure that a person undergoes when he is unable to pay back his debts. It is a legal process that establishes that a person is no longer able to pay back his debts as promised, the result of which is that once the bankruptcy is discharged his creditors loose legal rights to try and recover the money or file a lawsuit in court regarding their claim.
However, this does not mean that the person filing for bankruptcy gets absolved of all responsibility to pay back their creditors. Depending upon the financial situation of the person the court might decide that either some of the assets of the person out to be absorbed to repay the lender’s [Chapter 7] or a repayment plan is developed by the plaintiff and his attorney with the approval of the court to pay back the lenders in whatever manner possible [Chapter 13].
That in short is what bankruptcy is all about.
Many people worry about what to expect when going through bankruptcy filing.
The truth is that the whole procedure can be much less lackluster than you feared it might be. The first step in filing for bankruptcy is to find responsible and good legal advice through a bankruptcy attorney. There is a lot of paperwork involved with filing and in case you are holding onto a job you’ll find it very difficult to manage all the proceeding itself. Time is not the only issue here. Filing for bankruptcy is a complicated process and you will also need expert advice as to which the action to follow. Finding a bankruptcy attorney and a good one it is probably the best favor you can do yourself under the circumstances.
You should be prepared to attending meetings with your attorney to sort out your situation and decide on a course of action. In case you are filing a Chapter 7 bankruptcy then you ought to be prepared for meetings with a representative of the court as well as your creditors to decide upon division of assets for repayment.
For the actual filing of bankruptcy you will have to attend the court. Being in a court is not the most pleasant experience but it does not also have to be very scary one. The court will probably not be what you expected if you are going by comparisons to what you see on television and movies. It just might be a regular room at folding chairs and tables. There probably will be many other people present during the time of filing but these were mostly be people waiting their own turn and will not be very interested in your case and filing. So that is something you don’t have to be conscious about. Also, it is legal procedure for a notice of bankruptcy to be taken out in the newspaper. However, the likelihood of your friends and family stumbling across that section is slim. Your friends are not very likely to find out about your bankruptcy filing unless you tell them about it or they also happen to be your creditors in which case they will receive notification of your filing in there mail.
Once the court has your petition and approves of your repayment plan or decides upon the absorption of your assets, you will be set to discharge your bankruptcy. Most of the people are able to avoid the absorption of most of the major assets in a chapter 7 bankruptcy. If you are filing chapter 13 then repayment plan will have to be approved by the court at which point your creditors will have the right to pose an objection. Your creditors might be present in court during the time of the filing but they are not allowed to disrupt the proceedings in any manner.