How to File Bankruptcy Online
Filing for bankruptcy is a serious decision that will have a life altering impact, namely the opportunity to relinquish your debt and rid yourself of constant harassment from various credit card companies, banks and collection agencies. Bankruptcy laws vary widely from state to state. However, in general there are some common themes. Eligibility for filing a bankruptcy will depend on what state you are in. This is also true for the various requirements. Most states will require that you provide an in-depth analysis of your finances by filling out different schedule forms involved with the Chapter 7 bankruptcy process.
When considering filing for bankruptcy, it will be very important to organize all of your past financial records in great detail. This will include expense records, such as utility bills, mortgage payments, car payments, etc. As well as these documents, one must also have income statements, tax return forms, and information pertaining to any benefits they are receiving, both at the federal or state level. Unlike other bankruptcy chapters, filing a chapter 7 bankruptcy does not involve any repayment plan. Rather, the bankruptcy trustee, there to support the creditors’ interests, will take possession of the debtors “non-exempt” assets to auction off and help repay the respective creditors. In light of this, it is important for those who are thinking of filing for Chapter 7 bankruptcy to weigh their options.
In almost every case, the debtor will have to part with property that is dear to him or her. That includes property in terms of real estate, trusts, savings, family heirlooms, investments, and many other personal assets. Despite this, state laws will provide protections for certain properties that fall under the “exempt category.” Exempt items will often include tools of one’s trade, public benefits, a vehicle for transportation (up to a certain point of value) as well as clothing and other basic necessities. Non-exempt items will generally include anything considered to be of luxury value, this will take account of expensive clothing items such as fur coats, jewelry, silver, basically any items of value that are not deemed “necessary."
Another important aspect to take into consideration when filing for Chapter 7 bankruptcy is whether or not your debt is secured or not. Secured debt is based on an agreement between the borrower and creditor, where upon default of payment the creditor retains the right to seize collateral. Unsecured debt, in contrast, is based on money that the creditor lent out based on the assumption that the borrower could repay. In the process of considering filing for a Chapter 7 bankruptcy, it will be crucial to determine whether your debt is secured or unsecured.
Despite the hardships of parting with such sentimental property, some cases truly do warrant such action. In many states, such as New York, upon filing for Chapter 7 bankruptcy, the debtor will receive some forms of immediate relief, such as “automatic stay.” Automatic stay in most cases will freeze the creditors actions against the debtor, including access to the debtor’s bank account.
After having done the preliminary research, one can begin to determine whether or not Chapter 7 bankruptcy makes sense for them. Obviously, each individual’s situation is unique, which is why bankruptcy lawyers must evaluate each client’s options on a case-by-case basis. If you do feel that Chapter 7 is right for you, then you may begin taking the next steps by finding your states respective requirements and starting to fill out the appropriate documentation. In most cases, this paperwork can be found online for free.
