Should I File for Bankruptcy, and what are the Appropriate Steps to Take?

Should I File for Bankruptcy, and what do I do next? This is a question many Americans are afraid (and in denial) to ask. Bankruptcy is indeed a hard pill to swallow. However, if your financial situation has really been affected by the recession and you’re on the verge of losing everything, now’s the perfect time to ask yourself the question honestly, then educate yourself about surviving bankruptcy.

So, should I file for Bankruptcy,? According to the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), prior to filing for bankruptcy, one must obtain consumer credit counselling within 180 days of the date of the bankruptcy filing. Credit counselling should be from an entity approved by the U.S. Trustee. This is important to educate yourself with other alternatives than filing a bankruptcy case.

After answering the oh-so-important question: should I file for bankruptcy, one should know about the important steps to take next. First of all, make damn sure that you have no other alternative. Bankruptcy will appear in your credit history file for up to 10 years. However, if your financial situation is in real bad shape, bankruptcy will allow you for a fresh start.

There are actually two common types of bankruptcy. The most popular is the straight or liquidation bankruptcy. Another is the Repayment Plan. Liquidation Bankruptcy is much more difficult to obtain because of the means test, thus, many people are forced to file the latter type of bankruptcy plan.

Another important question is ‘Should I hire a lawyer?’ Some choose to file without the help of a lawyer, although it’s highly recommended to get a lawyer. Of course, you should know how much it costs. Some lawyers give a flat rate, while others base it on the amount of debt you have. Others let you pay in instalments, while others require you to pay up front. Average lawyer rate is around $1,700, but may vary depending on the state you are living in. Meet with the lawyer so the two of you could go over your case, so he can determine which bankruptcy is best for you, based on your financial state. There are some states that allow you to file for free if you don’t have the financial means.

Refer all your creditors to your lawyer, so they will be able to speak on your behalf (Which means, equals no more annoying calls at your home and office! Hooray!). Once a lawyer has filed your case, absolutely no creditors should contact you regarding your debt. If they go against this, a wilful violation will be assessed against the creditor, including attorney’s fee, appropriate cases and punitive damages.

Now that you are equipped with all the right information, you can now ask ‘Should I file for bankruptcy,?’ with no hint of fear or uncertainty.