Whether you want to start Chapter 7, Chapter 13, Chapter 11 bankruptcy or any other way, you must know all the relevant rules and regulations. It is extremely important to fulfill them; otherwise, your request will be rejected. Even when you prosper, you must know what is required later to clean up your financial situation and start from scratch.
Difference between Chapter 7 and Chapter 13
To begin, you should know that there are different rules based on the type of bankruptcy or the “chapter” that you select. Bankruptcy under Chapter 7 uses the liquidation process, by which you must sell several of your assets (except some exempt assets) to pay as much of your debts as possible. The Chapter 13 bankruptcy includes a reorganization plan; that is, you will keep your assets, but you must make a payment plan with the creditors to have control of the debts over time.
Remember that applications under Chapter 7 and Chapter 13 are not the only options, but they are the most common.
Without prejudice to what type of bankruptcy is adopted, there are some general provisions that you must know from the beginning. These include:
You can not hide any debt
When you make the request, write down all the debts you have, from commercial loans to credit card debts. Do not leave anything without mentioning. The court must know all your debts, not a part of them, since bankruptcy is an integral state that affects all your financial situation.
You can not hide any assets
This is something that many people want to do, since they think that in this way they will be able to keep their assets. For example, they may have a second car they do not want to lose, but they know it is not exempt, since only the main car will be out of bankruptcy. If you are in this situation, you should know that you must include in the list all vehicles, real estate, bank accounts, investments, etc. Never leave assets outside, even those you know are exempt.
You should not increase the debts before making the request
When you decide to apply for bankruptcy, you may be tempted to increase your credit card debt with items that can not be returned, such as food, since you feel that, in any case, that debt will be liquefied after the filing the bankruptcy order. However, if you do it intentionally, you will be committing a federal crime, which you should avoid at all times.
Always tell the truth
When you file a bankruptcy petition, you will end up with a process before a federal bankruptcy court in the United States. You can not lie before the judge; otherwise, you will receive charges against you. This is true, both for oral and written statements. Always tell the truth; You must tell the court what exactly you owe, what you have, etc. Do not lie for any reason, either to safeguard your image or protect your assets. Provide the court with all the necessary personal and business information, report all income (even those that have not yet been collected) and answer all your questions truthfully. In this way, the process will be faster and more fluid.
Of course, there are additional provisions based on the type of bankruptcy application you make, such as how often you must pay your debts under a payment plan or how quickly you must sell the assets according to a settlement plan. Make sure you analyze all these details and ask all the questions you have. However, the above provisions are an excellent starting point since they apply to all cases.
Speak Today with a Qualified Bankruptcy Stage Manager
This article aims to be useful and informative. But legal issues can be complicated and stressful. A Qualified Bankruptcy Stage Manager can address your particular legal needs, explain the law and represent you in court. Take the first step now and contact a qualified Stage Manager in bankruptcy near you to discuss your specific legal situation.