Bankruptcy is a procedure through legal means that allows people who are lost in debts to start all over again financially. When a person is declared bankrupt or is bankrupt, it is advisable to claim bankruptcy through the set rules and regulations. However, precaution should be taken before claiming bankruptcy since not all situations call for the claim and once you declare and claim your situation, it stays in your credit report for a long time which could be damaging.
The very first thing you should do when the need to claim bankruptcy arises is to get a bankruptcy lawyer. The lawyer is responsible for advising you on the path to take and educating you on which bankruptcy best suits your situation. He is also the one who will find a good rate for your file and take care of the proceedings.
What Is Claim?
A bankruptcy claim involves the declaration of a person or business that he/it is unable to settle outstanding debts to creditors thereby seeking the intervention of the court on the repayments. This is a clever way for debtors to begin building on their financial woes without getting harassed over them as they get better terms to deal with creditors.
When thinking of going for the claim, it is important to evaluate your current situation to be sure that you indeed need to make the declaration. This is because the affair can turn out to be a bit costly and you are not too sure what the results will be. The court has the right to reject your file depending on how your current situation appears to it. It could end up claiming that you are in a position to repay all your debts and ordering that you do so, turning against you. It is therefore very important to be sure of the step before taking it.
To make a bankruptcy claim work to your advantage, it is important to seek the services of a good bankruptcy lawyer. The lawyer should be familiar with the proceedings of the claim and should be in a position to advice you on what to expect from the court after evaluating your financial status. You should make a point of going to a lawyer with whom you are comfortable and whose rates are not too high since you will be required to pay other fees such as the court fees.
In the presentation of your claim file, the lawyer will be required to include a list of your liabilities and assets. The court can then instruct that the assets be sold to enhance your debt repayments even though they maybe incompletely paid if the asset value falls short of your debts. If there is a shortfall, you will be issued with a repayment plan that you are supposed to follow to completely pay all debts.
Bankruptcy laws are meant to provide debtors with a fresh start financially if well handled. This is a way of rebuilding on your bad credit history. It is only advisable that after managing your debts, you avoid things that incur debts on your side. The best way to avoid such situations is to live within your means keeping debts at bay.