One who has gone bankrupt, filing for bankruptcy can be a bitter pill to swallow. It is quite hard hitting especially if the person filing for bankruptcy is himself responsible for his state. However, it is also true that the Bankruptcy laws were put in place for the protection of the bankrupt. It doesn’t matter to credit card companies how loyal and just you have been and they never take a step to make things easier for you. Therefore, it is always good to know the process involved in filing for Bankruptcy. It is good to have an idea about these laws.

When you have no other alternative left, then only file for bankruptcy. It should be understood by the bankrupt that a bankruptcy remains as a black mark on his credit profile for more than ten years. Before filing for bankruptcy, the person should get consumer credit counseling from a US Trustee approved entity within 180 days of filing. Such counseling helps the bankrupt to come up with alternatives. Next you must keep in mind both types of bankruptcy types – The Chapter 7 (liquidation bankruptcy) and Chapter 13 (primarily a repayment plan for individuals). Mainly because of the Means Test, Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCA) has made it extremely difficult to file a case under Chapter 7.

The bankrupt should always hire a lawyer prior to filing for bankruptcy. Choose a firm where you are always in direct contact with a lawyer. It is not always possible if one chooses a large firm. Research properly to find the most suitable firm. The lawyer you select must be capable of answering all your questions and should also ask you a lot of questions to get an upper hand in the case. Having a look at your financial records, he should be able to tell you which chapter is best for you. With a lawyer’s help you can also easily clear the means test.

The fees for filing vary a lot. Find out the exact cost and then file. Going for a flat fee is better for a bankrupt than paying a fee based on your debts. There are even places where the bankrupt can file for free> He must be aware of these places. Bring all your creditors to the lawyer’s office and discuss. The moment you file for bankruptcy, the ‘Automatic Stay’ won’t allow any creditor to contact you regarding any debt. Never use credit cards for filing bankruptcy case. Wait for a Creditors’ Meeting before filing. Only the Trustee has the power to judge whether there are any asset of yours that can be liquidated.