For the last few years many Americans have learned about filing for bankruptcy whether they wanted to or not. In fact, because of the large numbers of Americans filing bankruptcy, bankruptcy no longer carries the stigma that it did in the past. It's pretty hard for debt collectors to pull the wool over the eyes of an aware public. Everybody probably knows someone that is filing or had to file bankruptcy in the last few years. Rolling down Main Street, it's common to have at least one foreclosure in a neighborhood. No one should really find it a surprise that unemployment is still at 8%. Now that the stock market has broken an all-time high since the summer of 2007, the media continues to beat the drum that the recession is over. The only problem with that is other than the stock market there are no other signs to show any kind of recovery. Last quarter, the GDP was a dismal negative.1%. Big retailers have announced large numbers of store closures and dismal sales numbers continue to roll in. The only thing that continues to drive this economy is debt. The debt to income ratio in the average American household has increased from 50% to 150% over the last four years. When people should be filing bankruptcy, they are able to continue borrowing on credit cards. This debt bubble is on the verge of popping and Middle America needs to have an exit strategy including filing Chapter 7 bankruptcy.
When filing Chapter 7 bankruptcy, an individual will be required to gather a little financial information to supply to the bankruptcy court. While it is still possible to file bankruptcy on your own, it's much easier to hire a bankruptcy attorney. For those who think it's too expensive, all they need to do is add up the debt that will be discharged in a bankruptcy filing and compare that to the cost of the bankruptcy attorney. That's when we'll really see the value. Whether you use a bankruptcy attorney or do-it-yourself, the same information will be required of the debtor. The individual will be required to supply two years of back taxes, six months of bank records and a complete itemized list of all of their debts and creditors. Added to that, the individual will be required to list all of their personal property on one of the schedules in the bankruptcy petition. Prior to filing the bankruptcy petition, the individual will be required to complete a pre-bankruptcy credit counseling course. This certificate will be turned in at the time of filing bankruptcy at the court. Upon filing, the bankruptcy court will set up the date and time for the 341 meeting or meeting of creditors. The individual will be required to attend this with their bankruptcy attorney if they have one or by themselves if they are filing pro se. At the 341 meeting, the bankruptcy trustee will ask some basic questions about the bankruptcy petition and if everything looks good the individual will be done with the court part.
After the 341 meeting, the individual should complete the post-bankruptcy financial management course that needs to be turned into the court prior to receiving a bankruptcy discharge. Failure to take this course will end up in a dismissal of the bankruptcy filing. If everything is good, all the person needs to do is wait for the bankruptcy discharge in the mail a few months later. The whole process of filing Chapter 7 bankruptcy takes about 4 to 6 months from beginning to end. People in financial trouble now, should take the time to educate themselves so they will have an ace in the hole when things get worse.
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