Many responsible people are having to file for bankruptcy due to unavoidable circumstances like job loss, and lowered wages, and there is little in the way of alternative funding.
The biggest question we ask when we are pinched to the point where we must consider bankruptcy is; how long will a bankruptcy take to finalize? The answer to that question can depend on a few things, like which type of bankruptcy you qualify for and plan to file.
There are two standard types of bankruptcy; Chapter 7 and Chapter 13.
Chapter 7 is more difficult to get approved, as it is a straight liquidation of assets with stringent regulations and criteria.
Most individuals filing for bankruptcy will be forced to file Chapter 13, after filing a 2 page petition and paying a fee to file.
Your first step will be the actual filing, followed immediately by the petition to your creditors to stop collecting.
They may no longer demand any funds from you for outstanding debts owed, nor can they take you to court or repossess any property.
You will file this petition, with the names and address of all of your creditors with the court, within several days of filing for Chapter 13 bankruptcy.
One week after you submit your list of creditors, you will be supplying the court with documentation of your assets, income, expenses, financial plan for the re-organization of finances under Chapter 13, and proof that you are able to stick to your plan.
Next, you will meet with your trustees to finalize your financial plan.
This meeting will be anywhere from one to three months after your initial Chapter 13 filing, and will take only ten minutes.
The meeting will most likely consist of you swearing to tell the truth, and then answering questions that will be recorded.
Your creditors will have the opportunity to ask you about your financial plan.
Very rarely do creditors actually show up for these meetings.
The repayment plan begins after this meeting.
On the 60th day after the creditor meeting, there is a deadline for creditors to file lawsuits that dispute your intent to discharge a debt owed.
For Chapter 13 bankruptcy, the length of your repayment plan will depend on how much you owe, and how much money you make per month.
In Dallas, bankruptcy laws require that all plans take anywhere from 36 to 60 months, even if you are able to pay off your debts before the minimum time of 36 months.
Once you complete your Chapter 13 bankruptcy, you can expect it to stay on your credit record for up to 10 years.
Take this into consideration before filing, especially if you want to purchase a home or car in the near future, or are looking for a new job.
Potential creditors and employers typically do not like to see a bankruptcy during a background check.
If a bankruptcy filing is inevitable, take the time to explain your situation to a potential employer.
When a bankruptcy filling in inevitable, be prepared to gather plenty of documentation, a good long term repayment plan, and patience.