Bankruptcy is a legal process that begins after a business or person can no longer pay outstanding obligations or debts. This process begins after the debtor files a petition, mainly on behalf of creditors.
All the debtor’s assets are evaluated and measured and can also be used to repay a section of the outstanding debt. Bankruptcy gives a business or individual a chance to start afresh, and these cases are handled through federal courts in the USA.
You are advised to know what occurs after filing for bankruptcy and contact a bankruptcy attorney to make the best decision. These individuals will also elaborate on the startup shutdown process, and below, we discuss what happens after filing for bankruptcy.
How To File For Bankruptcy
Filing for bankruptcy might be the best choice if you have accumulated debts with no change in your financial circumstances. The bankruptcy filing process entails the following;
1. Looking For an Attorney
The first step before filing for bankruptcy is looking for a lawyer who specializes in the field. This lawyer should be familiar with all bankruptcy laws and know all updated changes and laws. The lawyer should also be easily available to answer their client’s questions when needed.
The first step in finding a good bankruptcy attorney is researching. Remember, the attorney will inquire about your debts and creditors, and you should have exact names and addresses.
These attorneys also know how to dissolve a business, which prevents you from further losses.
The signed paperwork is then presented at the bankruptcy court, where they assign you a bankruptcy case number. This paperwork is then forwarded to your creditors to inform them you are bankrupt, and their correspondence should cease at this time.
3. Meeting Creditors
The meeting of creditors occurs before a trustee in the presence of your attorney. The trustee calls and asks questions regarding your debts and assets, mainly those featured in your bankruptcy claim.
Trustees then hand out a repayment schedule and any other assets that will help the creditor with repayment.
When Should You File For Bankruptcy?
Bankruptcy is ideal for you if your debt is getting out of control. Below we discuss when you should consider filing for bankruptcy.
- When your everyday necessities head to credit cards
Putting your necessities on a credit card because you lack physical cash is a significant sign that you are experiencing debt. Also, paying one credit card with another indicates that you should file for bankruptcy. It is advisable to start the process with Goodbye Startup for the best results.
Bankruptcy is an option for people or businesses experiencing a financial struggle. These parties can either clear a part of their debts completely or slowly. Applying for bankruptcy gives you an automatic stay which stops creditors from harassing you.
This application also prevents them from garnishing wages, accessing funds in your account, or getting other assets.
Bankruptcy occurs when a business or person is unable to clear outstanding obligations and debts. This process begins after a debtor files a petition, and the above article has discussed all you should know about it.
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