Understanding Bankruptcy Evaluation
Bankruptcy is a term which is used legally when either a business or an individual cannot repay the debts which are outstanding. This process starts with the debtor filing a petition or can also be filed on behalf of the creditors. The assets of the debtor are measured after being evaluated and these can be used to pay off the debt. Bankruptcy evaluation needs to be handled only by professionals who are well qualified to do so. The laws of bankruptcy are written to provide a chance to the people whose finances have collapsed, to opt for a fresh start.
Basics of Bankruptcy:
All the cases are handled by the courts of the federal and the decision is taken by the bankruptcy judge. This can be deciding on whether a debtor can be discharged of the outstanding debts or needs to file for bankruptcy. There is a possibility that the bankruptcy administration being handled by a trustee appointed by the United States and is an officer of the justice Department. It is wise to opt for bankruptcy evaluation before deciding whether to file or not.
When to file for Bankruptcy:
If you think you will take around five years or more to pay off the outstanding debt, it is advisable to file for bankruptcy. You need to know that this bankruptcy code has been offered to people to ensure they get a second chance and not to punish them. There might be an issue with the debts of the credit card, debit card or a mortgage debt which has risen out of hand.
The negative of declaring bankruptcy is that this tends to remain in the credit report for a minimum of 7 years.
Steps for filing Bankruptcy:
Before you opt for bankruptcy evaluation you need to ensure the following steps are carried out.
1. You need to ensure that you compile all the financial records which include the credit card, debit cards, assets, debts, income and expenses. This offers a clear understanding to the professionals handling your bankruptcy evaluation.
2. Before filing the case you need to opt for credit counseling. This needs to be carried out at least 180 days before you file for bankruptcy. This service can be online or even on the phone. A certificate of completion is given once you complete this counseling and this need to be given when filing for bankruptcy.
3. Find a professional who deals specifically in bankruptcy for filing the petition. It is risky not to opt for professionals.
Some Benefits of Filing for Bankruptcy: Filing for bankruptcy after the bankruptcy evaluation by a professional can benefit you in quite a few ways. You have a chance of being released from the debts and you can gain control over the situation. You have an opportunity to achieving the goals set for the finances and can also plan on saving. You are saved from the harassment calls made by your creditors. You can say, you are ‘free’ with the bankruptcy evaluation.