The Basics of Bankruptcy Filing

Bankruptcy

The term bankruptcy is enough capable of evoking terror. It is considered back-hole where a person’s financial structure collapses and it is almost impossible to get out of it. The complete destruction of a person’s financial base is called bankruptcy. People think that someone who has declared bankruptcy has nothing left; it is equivalent to a life that is over.

Actually, the situation is not that over-dramatic with bankruptcy. Indeed, it is a major setback, but you have to keep in mind that bankruptcy is not a problem; rather it is a solution for the financial problems you face. It is to improve the situation and restructure the financial stem.

Many people ask about how to file bankruptcy in Oklahoma. As the rules and regulations get altered from state to state, the filing process may vary as well. Here are some basics of bankruptcy that you will need to know no matter which state you belong to.

This is basically a legal dismissal of existing debts that both individuals and corporations can file for. Bankruptcy can be filed under chapter 7 and chapter 13. These two chapters have incorporated different circumstances and a different set of rules under which they can be filed.

Chapter 7 bankruptcy mainly deals with consumer loans, credit card debts, medical debts and personal loans. Once you file for bankruptcy under chapter 7, the debts are dismissed and the trustee takes control of your finances and decides how to distribute your assets to pay the creditors. In case of the debt secured by the auto loan or mortgage, the creditor can take possession of the properties.

It is not like that the chapter 7 bankruptcy would take all your properties to pay off the loans. If you own any other property like the vacation home or something else, you will have to give up either of it.

Chapter13

Chapter 13 is quite different from chapter 7. You can ask your lawyer about how to file a Chapter 13 bankruptcy in Oklahoma before filing it. With this chapter, the court grants you a new debt schedule; a tenure within three to five years. You have to be an earner in this case, so that the court can allow making the payment from your earning, and retaining most of your assets. Chapter 7 Bankruptcy can affect your credit report for 10 years and Chapter 13 sticks to it for seven years.

Though the processes of bankruptcy have made the payment option for the unpaid bills easy, it is not something you should take very lightly. It affects your credit score for years. Many people do not know when to file for bankruptcy and they just leap without looking once. After bankruptcy, you have to take steps to repair the credit score and get it back to the proper place again. Finance management and paying off the bills on time is the best thing ever. Bankruptcy is the last option when you are utterly clueless about the repayment of your debts. It is imperative for the debtor to complete a financial management course in order to settle the finance properly and don’t be in need of filing for bankruptcy again.

You can connect with Chris Mudd and Association to get a detailed view of bankruptcy and easy processing of it. If you are with an experienced lawyer, the journey of bankruptcy will be a lot easier for you.