So you finally decided to file for bankruptcy but have you already thought about the process that you are about to experience once you file for bankruptcy? Deciding to file for bankruptcy is not as easy as thinking that you can easily get away of your debts, but think of the process as a long and time consuming one. Depending on the category of bankruptcy you are filing, certain procedures must be met.
Under Chapter 11 Bankruptcy Laws, it states that corporations are qualified to file for this type of bankruptcy. To file for Chapter 11, the board of directors of the company should first discuss with their attorney how they plan to pay the debt. Before filing for Chapter 11, a concrete plan should be established to avoid confusion of irregularities during the processing of the case. It is a must that corporations hire attorneys to file for bankruptcy because mishandling of the case can worsen the situation.
The same process of filing for bankruptcy is required of individuals filing under Chapter 13 and Chapter 7. An individual filing for bankruptcy must compile all receipts, bank statements and other proof of expenses over the past months for purposes of computing the expenses over the earnings to back up the filing of bankruptcy. Under Chapter 13 Bankruptcy Laws, an individual who is proven to have sufficient funds to pay for a portion of the debt is required to pay that portion in an agreed loan term, usually 5 years maximum. On the other hand, Chapter 7 bankruptcy Laws states that an individual who is proven to have no sufficient funds or properties to pay a portion of the debt is cleared of the debt. Though not required by law, an individual may or may not hire an attorney to assist in filing, but it is always advised to get one to minimize errors that may occur when filing without professional supervision.
