The Basics of Bankruptcy Filing

Bankruptcy

The term bankruptcy is capable of evoking terror. It is thought of as a complete financial breakdown – a void that is virtually impossible to get out of. 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 having your life over.

Well actually, the situation with bankruptcy is not that overly dramatic. Indeed, it is a big deal, but you have to keep in mind bankruptcy is not a problem; rather a way to solve the financial problems you face. It is to improve the situation and restructure the financial stem.

Many people ask 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 of the bankruptcy basics that you will need to know no matter which state you belong to.

Bankruptcy is basically a way of legally dismissing existing debts, which is not just for corporations; individuals can file as well. Bankruptcy can be filed under chapter 7 or chapter 13. These two chapters have different circumstances incorporated into them and a different set of rules under which they follow.

Chapter 7 bankruptcy mainly deals with consumer loans, credit card debts, personal loans and medical debts. When filing for bankruptcy under chapter 7, the debts are dismissed after your trustee decides how your assets will be divided to pay the creditors. In the case of a collateral-secured debt like a car loan or home mortgage, creditors can claim the properties.

It is not like chapter 7 bankruptcy would take all your properties to pay off the loans. If you own any other property like a second house or valuable collector car, you can give that up instead of your regular residence or daily driver.

Chapter13

Chapter 13 bankruptcy is quite different from chapter 7. You can ask your lawyer how to file a Chapter 13 bankruptcy in Oklahoma before taking this course of action. With this type, the court permits a debt schedule usually from three to as much as five years. Your income must be above a certain range, so that the court can allow making payments from your earning, and retaining most of your assets. Chapter 7 Bankruptcy can affect your credit for up to 10 years, whereas chapter 13 is on your credit for only seven.

Though the processes of bankruptcy have made a payment option for the unpaid bills easy, it is not something you should take 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 your credit score to get it back to the proper place again. Finance management and paying off the bills on time is the best thing you can do. 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 their finances properly. This course is part of the process when filing for bankruptcy and helps to educate you so that you don’t get yourself back in the same situation.

You can connect with Chris Mudd and Associates to get a detailed view of bankruptcy and make an easy process of it. If you are with an experienced lawyer, the journey of bankruptcy will be a lot easier for you to take back financial independence.

** Disclaimer: This blog post does not constitute legal advice, nor does it create a client-attorney relationship.