Hi my name is Maria Enomoto from Consumer
Credit Counseling Service and we are going to be talking on how to file for bankruptcy.
Bankruptcy is an option that a person has to discharge the debt that they can’t pay
anymore. Of course the bankruptcy should be the last, last resource, the last option after
trying several things. Because this is something that’s going to hit really hard on your credit
report. It’s going to be a public record that will stay there for ten years. So you really
need to be sure that the bankruptcy is the last thing available for you to get rid of
the debt that you owe, to discharge the debt. So first thing if you are feeling overwhelmed
and it cross you mind that you want to probably to file bankruptcy, the first thing that you
need to do is to seek some help. Probably meeting with a credit counselor to analyze
your options, analyze your financial situation, and then discuss your options will be a great
help. Because probably there’s something else that can be done. Work with your creditors,
work a payment plan, have some settlements done before you go and file for bankruptcy.
So first thing just get some help from and some credit advice from a credit agency, a
credit counseling agency to discuss your options. What also can be done. If the bankruptcy seems
to be your last option and only option to get rid of that debt, then it’s going to be
good for you to have some legal advice. Because bankruptcy is something that you need to do
through the court, you actually need to file your papers in court, in the bankruptcy court.
So it’s good for you to have some legal advice just to make sure that your papers are correct,
that everything is presented and your case is not going to be dismissed. Another thing
why it’s good for you to have legal advice and the counseling session, it’s for you to
know about the process of the bankruptcy. Since October 2005, the bankruptcy law changed
and now not everybody can apply for any kind of bankruptcy. Basically there are two types
of personal bankruptcy. The one that is called the chapter seven and the one that is called
the chapter thirteen. The chapter seven is the once that is also called a straight bankruptcy.
Where you include the debt and you can discharge one hundred percent of what you already put
in there. This charge basically means that you are not going to be legally responsible
to pay for that debt once it is discharged by the court. But for this chapter seven you
need to qualify by income, and it usually through the means test that an attorney or
a paralegal service can do for you. If you don’t qualify for seven, then they will see
if you qualify for a chapter thirteen. But a chapter thirteen works out a repayment plan
that’s usually worked through the court. The court will review your papers and will assign
you with a payment plan that will last in between three to five years, and it’s when
you paid off this repayment plan set by the court that they will discharge the remaining
amount of your debt. So this is the second bankruptcy, and it’s also good for you to
know according to your situation if you finally have decided to file for bankruptcy what type
of bankruptcy will be suitable for you.