If a person or business is unable to pay their debts, bankruptcy is intended as the last resort. One of the bankruptcy’s advantages is that certain debts can be discharged. However, a bankruptcy declaration can sometimes have negative effects. Bankruptcy can severely damage a person’s credit score, and it can change how their assets are treated in other legal matters, such as estate distribution and divorce.
Declaring Bankruptcy
Bankruptcy is a multi-step process. First, the client must visit this website and their bankruptcy attorney in St. Charles, MO must file a petition; then, they must file a financial statement and list their assets. The financial statement describes the debt owed and the reasons why the person is filing. The statements must be filed within two weeks of the petition filing, and failing to file on time can mean a case dismissal.
After Declaring Bankruptcy
After person files for bankruptcy, other things happen as the case progresses. The first step is the issuance of an automatic stay, which is a court order barring creditors from further collection attempts. A court-appointed trustee is chosen to administer the bankruptcy estate, and in Chapter 13 or 7 cases, a creditor meeting is held. If the debtor doesn’t attend this meeting, their case may be dismissed. Following the creditor meeting, the client either negotiates a payment plan or sells their assets to pay creditors.
Things to Consider Before a Bankruptcy Declaration
Bankruptcy isn’t always negative. In some cases, it can help a person or business rebuild their finances, and some can even get credit cards later on. When filing bankruptcy, the client should consider its effects on other areas of their life. Bankruptcy can have widespread effects on a person’s estate, tax status and employment issues.
Does a Filer Always Need an Attorney When Petitioning for Bankruptcy?
Every case is different, and bankruptcy laws can be quite complex. Most people do not have the knowledge to go through the process alone and they need legal advice. Filers should consider hiring a bankruptcy lawyer with the Law Offices of Steven K. Brown, who can offer procedural advice and legal representation during court hearings. Hiring a bankruptcy attorney in St. Charles, MO, may be a significant expense, but it can pay off in the end.
