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Considering bankruptcy?

July 9, 2008

Sometimes a financial situation has become so dire that there are limited options to improve one’s situation.

If you have found yourself in that situation, you may be wondering if you can claim bankruptcy.

There are a few things you should know if you are considering filing for bankruptcy.

First, the Bankruptcy Reform Act of 2005 has set forth some requirements for those who do file for bankruptcy.

One very important requirement is that you must complete a pre-filing credit counseling session before actually filing for bankruptcy. If you file without completing the mandatory counseling session, your case will be dismissed, and your attempt to file will still be noted on your credit report.

At Advantage, we recommend you contact your local Bar Association and hire an attorney if you are planning to file for bankruptcy. While you can file on your own, it’s a complicated process. But, understand that if you hire a lawyer, there will be attorney fees on top of the bankruptcy filing fees.

Individuals can file for Chapter 7 bankruptcy — which means most of your debts are erased — or you can file for Chapter 13 — which means your debts will be restructured and you’re given a payment plan. Only some filers will qualify for Chapter 7. It all depends on each individual’s financial situation.

After you file there is a legal process that will take place that involves a court appearance. An attorney can explain all of the details.

One other part of the process is to complete an education class within 45 days of your court appearance. Your bankruptcy will not be discharged until you complete the class and send a copy of your completion certificate to your attorney.

For more information, check out this Bankrate.com article, or to talk to a credit counselor about your financial situation and to see if you have other options besides bankruptcy, call Advantage CCS at (888) 511-2227 or visit our web page at www.advantageccs.org.

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