What You Should Know About Bankruptcy

filing for bankruptcy

It is good that for most of us we never have to worry about bankruptcy. Maybe we just got lucky, or we planned well for our money. For those who find themselves in the face of bankruptcy, it is not bad luck that you are here. Things get out of hand when you least expect, don’t they? And once you are here, this is what you should know about bankruptcy:

To file for bankruptcy is not free

It is not enough to be broke and not able to pay your bills; filing bankruptcy will not be free. If you were lucky, you would have some few hundreds of dollars to make it easy on your end. You will need filing fee and some money for a lawyer. It could run into $800 or more. If you cannot afford a conventional lawyer, you should find a way to cheap legal services. It is not recommended that you through the process alone.

You will have to go to court

At first, this sounds scary. But believe me, it is not. You only have to show up for the process called a meeting of creditors. What happens here is that you will answer questions from your trustee and creditors. Good thing is that most of your creditors will not even show up. So relax, this not like attending a courthouse for criminal proceedings.

There are classes, and it is a must you attend them

Well, you will be going back to class. With bankruptcy, there are mandatory classes you will have to attend. They are two:

Pre-petition class: this one happens way before you consider filing for bankruptcy. It serves to ensure that you have exhausted all the avenues you could use to avoid going down the bankruptcy way. Once it is clear that there is no other way out, you are now free to file the petition.

Post-petition class: this happens right before your case is discharged. You are trained on how to manage your debts and finances. It helps you avoid ever getting into another bankruptcy plea. It comes at the very end of the
process.

The classes are pretty easy. You can take them online and in the comfort of your home. Just you know, they are not free. You will pay between $25-30 for each class.

Your debt tray is not wiped out clean

For many people, a successful bankruptcy plea means that all debts are wiped out, and you are free to begin a new financial life. How I wish this could be the case. You will have to make monthly payments to your creditors through a trustee. The only thing you can be sure of is that the payment will be lower than before.

It takes time to recover

Bankruptcy is not something you can get in and out when you feel like. Once you get into it, you will stay down for some time. You will begin to work your credit score anew, pay your bills in good time and rebuild your image. And once that is done, it does not automatically get you out of the hole.