The rate of bankruptcy is on the rise, because many people in society today find themselves in financial trouble.
The original purpose is to give sincere debtors a fresh start, clearing most debts and discharging debtors from legal obligations and providing the courts with non-exempt assets to be distributed among the creditors.
Initially a case is started with the filing of a petition which declares the debtors financial information and states his intent to declare bankruptcy. Many people who file for bankruptcy, file a chapter 7. This is for liquidation. This is where the debtor’s non-exempt assets are sold off and distributed on the basis or priority amongst the creditors.
But bankruptcy shouldn’t be the first step.
Many people who find themselves in trouble immediately go to bankruptcy.
First talk with your creditors and try to work something out. They would prefer to take payments than deal with paperwork and money that goes into legal action that they will need to take. Next to this, speak with a non-profit debt consolidator. Many people who think they are deep in trouble are only borderline, and with some help and creative financial dealings, debts can be paid off without initiating bankruptcy case.
When everything else fails, a bankruptcy lawyer should be contacted.
They are experts in the steps that need to be taken from filing the paperwork to the court hearing to determine if the bankruptcy filing is legitimate. False filing for bankruptcy is a crime and punishable under the law.
