File Chapter 7 Bankruptcy
Few debtors relish the prospect of discussing their private financial affairs with an attorney, and moreover, find the potential to file Chapter 7 bankruptcy disturbing. These tasks are easily put off - for one more day, and again - until procrastination becomes permanent and irreparable harm occurs. Most often, with expert assistance, irreparable harm is preventable by following a logical plan:
Determine net worth - The first consideration to file Chapter 7 bankruptcy is to determine net worth, for both non-exempt and exempt assets. Equity consolidation loans are extremely popular, but may or may not prevent a future bankruptcy. The underlying cause of financial strain must be determined, and fixed, rather than seeking a temporary band-aid to hide the problem. Many debtors discover later that consolidation loans merely reduced the value of their homestead exemption unnecessarily, and file Chapter 7 bankruptcy with reduced benefits. Think of net worth in terms of an overall realistic improvement over 5 years, rather than only protecting exempt assets from foreclosure. Specifically, decide how to best increase net worth over 5 years.
A realistic assessment of income - Many debtors fight to retain homes, cars and property only to discover later that income remains insufficient to pay monthly expenses. The goal of all debt relief options, whether through the courts or private commercial alternatives, is to reduce expenses to a level below income, which in turn, creates an opportunity for prosperity. Savings, investments, and sound money management are impossible when struggling to stay afloat each month. To file Chapter 7 bankruptcy successfully, debtors must wipe out debts and expenses to level that has a realistic chance for future success.
Determine the value of all available options - Most debtors may file Chapter 7 or Chapter 13, and potentially Chapter 11 for larger estates. Also, home equity loans, unsecured consolidation loans, credit counseling, debt negotiation, and a wide assortment of more sophisticated legal tools allow comprehensive financial restructures. All options include unique benefits, limitations and cost. All options also include intangible impact upon quality of life that can only be measured in terms of personal satisfaction, reputation, and potential. These intangible items must be determined based on personal values.
Accurate analysis of options - Comprehensive assessment of financial options is not for faint-of-heart. In small cases with few assets, this analysis may be fairly simple. In average cases, most debtors fall short of competent consideration of legal obligations, liability and total cost of available options. Be aware that free initial consultations are provided by many consumer bankruptcy experts, without obligation, that include a comprehensive value assessment. Cost, risk, probability, and long-term effect should all be considered to find the best alternative.
Reach a decision - Ultimately, each debtor must choose the best option find the courage to implement a sound plan. Even the best plan, if not used, is worthless. Nothing will change. Irreparable harm will likely occur. Or, by taking action with a realistic expectations, the road to financial recovery begins.
Technical requirements to file Chapter 7 bankruptcy
Thorough preparation to file Chapter 7 bankruptcy is essential. Both practical and legal requirements must be addressed:
- All debtors should insure financial records are in order and tax returns are filed.
- A complete list of all potential liability is required (debts owed, plus possible claims, disputes, lawsuits, etc.).
- A complete list of assets is required (physical, tangible, intangible, possible claims against others, possible causes of actions against others).
- Official forms and schedules must be used.
- To avoid dismissal, debtors must comply with all requirements set forth in the Code, Federal Bankruptcy Rules, Local Rules, and applicable case law. These legal items are extensively discussed throughout this website.
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