A Bankruptcy Court Filing Is Complicated

It must also contain information about any loan documents and real estate deeds of the petitioner. The first step in the legal process of declaring insolvency is the bankruptcy court filing. Then all the forms called bankruptcy schedules must be completed. The schedule contains the information of all the recent financial transactions made by the debtor as well as his or her present financial status.

The debtor has the choice of which bankruptcy court filing he wants to make between chapter 7 or chapter 13. The wisest plan of action is to speak to a bankruptcy lawyer that will guide the petitioner. Any bankruptcy court filing is incredibly complicated and legal representation makes the process smoother. The lawyer will then make the bankruptcy court filing on behalf of the debtor.

Due Course

Once the filing has been done a trustee will be appointed by the bankruptcy court to handle all the information and check for accuracy. Once the process has started, all the creditors of the petitioner will be advised that the debtor has done a bankruptcy court filing for declaration of bankruptcy. This means that any creditor involved will no longer be able to try to collect the outstanding debts.

Once the petition has been filed, what is called an automatic stay becomes effective. The creditors then may not make any form of direct contact with the debtor or try to stake a claim to any of the debtor’s assets. By the act of doing a bankruptcy court filing the debtor aims to liberate himself from the bulk of his debts.

It should be remembered that there are two areas of debt that cannot be discharged by doing a bankruptcy court filing. A debtor cannot discharge a student loan that had been guaranteed by the government. Debts incurred through the wrongful conduct of the debtor cannot be discharged either. In both these cases the debtor will still be liable to repay these debts.