Individuals or entities looking to file for bankruptcy should look for a qualified attorney to help with the case. Although corporations and partnerships are required by law to hire an attorney in order to file for bankruptcy, this is not a requirement for individuals. However, handling the case alone can be a very bad decision in this very delicate process.
Bankruptcy cases are inherently complex, and many laws apply to bankruptcies. One misstep can wreak havoc on your process and cause you to lose your rights as a debtor. The consequences of incorrectly filing for bankruptcy affect the debtor for many, many years. The implications are not only financial, but also legal. Hiring a qualified attorney is the first step in successfully filing for bankruptcy.
Steps to File for Bankruptcy
In the United States, in order to file for bankruptcy, debtors are required to list all their assets and liabilities – in other words, properties and debt -- in their bankruptcy schedules. No debt or asset should be left out. If a debt is left out of the schedule, it may not be settled, causing the debtor to continue to be responsible for that debt. Also, if a judge determines that the debtor is fraudulently leaving information out of the schedules, that judge may reject the discharge of all the debtor’s debts. In some cases, judges have found that debtors have submitted bankruptcy schedules but have hid assets, falsified records, or told lies. This fraud is a crime under U.S. law and severely punishable.
Individuals looking to file for bankruptcy in the United States should become aware of the laws in the United States Bankruptcy code, any local rules of the court that is handling the case, and also the Federal Rules of Bankruptcy Procedure. Most of this information is easily found online by running a simple search.
Requirement of Credit Counseling
It is a general requirement for individuals filing for bankruptcy to get credit counseling from an approved specialist. This counseling needs to start within 180 days before the bankruptcy case is filed. The credit counseling specialist will give the debtor a certificate of credit counseling that must be submitted along with a statement of compliance. Debtors who do not obtain credit counseling and follow these steps risk their case being dismissed.
Bankruptcy Legal Counseling
Anyone looking to file for bankruptcy should get legal services from a professional attorney specializing in bankruptcy law in the United States. Some people may even be able to get free legal counseling if they can prove that they cannot afford an attorney. Those who believe they cannot afford an attorney should contact their local bar association for more information.
Foreclosure and Bankruptcy
If a homeowner is behind on his or her mortgage payments, there may be options to help with this situation before considering bankruptcy. There are many fraudulent schemes out there promising help with foreclosure, so homeowners should search for help with caution. The first point of contact should be the homeowner’s mortgage company in order to find out which programs they may have available.
