The Important Things to Know About Bankruptcy

Some people view Bankruptcy as an easy way out of a debt problem. The law has a provision that allows people that really cannot repay their debts to start over financially. However, to qualify, you need to pass through very strict rules and procedures set up by the government. To have an easy time filing, you will need the support of an attorney. Here are some of the things that you need to know before you can hire a lawyer.

The requirements for filing

Despite the fact that filing for bankruptcy is supposed to help those that are really in financial problems, there are certain people that try to use the procedure to evade paying debt even when they are capable of doing so. There are also individuals that try to use the procedure to defraud the government. As a result, very stringent rules have been put in place to prevent this from happening. To file for bankruptcy:

  • You have to prove that your income level is either equal to or less than the median income level for your state.
  • You have to be ready to list all the assets that you own and give a list of your debtors and the amount of money you owe them.
  • You must prove beyond doubt that you are not able to repay a quarter of the total debt you owe within a period of 60 months.

These are just a few of the rules that you will have to comply with when filing.

Common mistakes that people make

It is important to have the counsel and representation of an attorney when you decide to file for Bankruptcy. This is because the review of the claims is very strict, and one little mistake could lead to the plea getting rejected. Here are some of the common mistakes people make.

  • Trying to hide some property from the government
  • Being unavailable for the hearings
  • Failing to turn up for debt counseling sessions
  • Filing for two subsequent bankruptcies within a period of 18 months or less

 

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