Facing bankruptcy is never easy. The choice to file for bankruptcy can be an emotionally trying one. Yet, the act of filing can end up saving you and your family years of greater hardship. It can also provide relief from the daily hassles of being contacted over and over by creditors. Filing a bankruptcy petition can often be the only way to save your home from imminent foreclosure. If your home has already been put on the auction block, bankruptcy can still provide you with a way to save it in some cases. Bankruptcy is an excellent option when creditors are overwhelming you with threats of bank account levies and wage garnishments. Before filing, there are several steps that you have to take.
What to Do Before Filing Bankruptcy
You must first get credit and budget counseling from an accredited agency. Within 180 of filing any Chapter of bankruptcy whether it is a 7, 11 or a 13, you have to prove to the court that you have obtained this type of counseling. Without this counseling, you will not be able to formally file a petition with the court. Once you get counseling, your next step will be to meet with a Kansas City bankruptcy lawyer. For individuals, there are two types of bankruptcy actions that are most commonly filed. These are a Chapter 7 and a Chapter 13. A Chapter 7 is where any and all assets that are not exempt get sold off to pay off various secured and unsecured debts. Chapter 13 is a reorganization plan where you work to repay creditors over the course of 60 months. Every debtorís case is different and every debtor owes different creditors and they face different financial consequences without filing bankruptcy. This is one reason it is essential to meet with a Kansas City bankruptcy lawyer. The lawyer will review your situation with you to determine which Chapter is best for you to file. For instance, if you have a steady income but have found many unsecured credit card bills overwhelming, you might be a good candidate for the Chapter 13 bankruptcy. You might have assumed the debt following a serious illness or a divorce. The Chapter 13 plan will discharge some of the debts and allow you to repay others over the course of five years. Debtors are free to file bankruptcy petitions on their own. There are reasons why this is not advisable. The bankruptcy laws are complex and they change at times. Only a bankruptcy lawyer in Kansas can help you determine which Chapter is right for you and can help you complete the petition correctly. Failing to fill out a petition correctly and completely can cause the court to dismiss the case. If this were to happen and you were hoping the filing would save your home before an auction, you could lose your home. Always consult with your local attorney after getting credit counseling so that you can successfully file the appropriate Chapter and obtain the relief bankruptcy provides.