The state of our economy has caused many people to question how to file for bankruptcy. Before making a final decision you should carefully consider all of your options, because a bankruptcy will stay with you for many years.

There are two common types of bankruptcy. There is a liquidation bankruptcy, known as Chapter 7, and there is a repayment option, known as Chapter 13. It is difficult to file for a chapter 7 bankruptcy now that the Bankruptcy Abuse Prevention and Consumer Protection Act has enforced a means test. This is a test that assesses your ability to pay some of your debt and forces you to file chapter 13 if it is determined that you can repay even some of your debt.

You should hire a lawyer to help you file for any form of bankruptcy, because they will research your options and make the process much easier. You can find lawyers that specialize in bankruptcy in several places, including the internet, but try to find a firm that will allow you to contact your lawyer directly to help you understand things more clearly and make educated decisions.

So you want toknow how to file for bankruptcy? First, your lawyer will decide which type of bankruptcy you should file and he will be a valuable tool in completing the means test, so make sure to choose a lawyer that will answer all of your questions and ask you for detailed information.

Lawyers all charge for their services differently, some by the hour, and some with one set fee, so make sure you discuss all payments and fees up front. The fees will vary depending on what state you live in, but an average fee is around $1,700.

After you have retained your lawyer, you can direct any creditors that contact you, to speak with your lawyer. Avoiding the constant calls from creditors is only one of the great benefits of hiring a lawyer. Creditors can be held liable for harassment once you direct them to your lawyer.

A 341 meeting with your creditors will be scheduled to assure the trustee that you understand what is happening and have been truthful thus far.

They will then calculate all of your debts and assets, including them all in the bankruptcy process.

If you plan on filing for bankruptcy in the near future, you should avoid using your credit cards. The discharge of owed debt can be challenged if a creditor decides to do so.

One of the most important steps for how to file for bankrupty is to do plenty of research -- bankruptcy filing is a big step and it effects your financial future for years.

The trustee will then decide what assets if any, can be liquidated to repay debts if you have filed for Chapter 7 bankruptcy. With Chapter 7 bankruptcy it is possible that you will not need to pay any creditors back, but if you file a Chapter 13 bankruptcy you will have to pay back as much of your debt as you can with a three to five year repayment program.

Most of the time, sixty days after your 341 meeting, you will have a bankruptcy discharge. Your debts will be discharged as long as no creditors have challenged a it or filed a lawsuit. Once you have received a discharge, you are no longer obligated to repay the owed debt. With a Chapter 13 bankruptcy, your discharge will happen thirty to sixty days after you make your final payment.

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