Declaring yourself or your small business bankrupt is a complicated legal process that requires you to follow specific guidelines and procedures. It requires you to show your inability to repay your debts despite your best efforts.
Once you file your bankruptcy petition, the court evaluates your assets and liabilities to confirm the facts stated in the petition. Then depending on the type of bankruptcy you file, the bankruptcy court/trustee will then evaluate the rest of your property. If the court is convinced that the individual applying for bankruptcy is not in a position to repay debts, the court may choose to discharge the applicant from some of his liabilities. A debt discharge means that the applicant no longer owes debts to his creditors.
On the other hand, if the court considers the applicant capable of repaying the debts, then the bankruptcy judge may dismiss the bankruptcy petition. In this case, the applicant continues to remain liable to his creditors. However, you can increase your chances of getting your debt discharged by filing for the correct bankruptcy chapter.
A bankruptcy lawyer can help you strategically plan this and make things easier for you. However, you need to do your part and be clear and transparent about your goals. If you wish to prevent creditors from taking action against you, then mention that. If you want to avoid the foreclosure of your primary residence, then it is recommended that you discuss that or any other goal you may have in mind. This enables the bankruptcy expert to recommend the best course of action. By hiring a bankruptcy expert during the initial stages of your financial crisis, you can prevent foreclosure or eviction or loss of property or wages.
If you would like more information about the bankruptcy process, contact a Citrus Heights bankruptcy attorney.