The term bankruptcy is formed by the Latin word ‘bancus’, which means a bench or table and ‘ruptus’, which stands for broken. The amalgamation of the two terms gives us the term bankruptcy which can also be referred to as insolvency is a legal status where a person or an organization cannot return the money that they owe to their creditors. These creditors may file a petition of bankruptcy against the individual or the organization. However, in most cases the debtor or the organizations voluntarily file for a bankruptcy petition to relieve themselves from the debts and start their lives anew.
Filing for insolvency can be quite a daunting task. It is best to hire a bankruptcy attorney so that he can guide you through the entire legal process. He will be able to give you information about the steps that are needed to file for the petition. The attorney explains that the first step is to garner all the financial information in the correct order. The lawyer will want information about your tax returns of the last two years, list of your secured and non- secured debts, legal papers for the properties that you own and also loan documents if you have any. When you are preparing to file for bankruptcy then you must be fully honest to disclose all your past and present income and expenditure. The attorney acts as a guide and counselor who advices the person or organization in debt to think over different solutions to pay the debt before filing for bankruptcy as the last resort.
The attorney will inform you that the two types of bankruptcy are most commonly filed for. One is Chapter 7 and the other Chapter 13. In Chapter 7 the assets are eliminated or liquidated while in Chapter 13 the debtor has to repay to the court. The repayment plan to the court continues for three to five years. In times of misery such as these you need to take the help of bankruptcy attorney. Fairfax, VA attorneys are experienced and guide debtors out of sticky situations. The attorney does most of the filing work for you. Once you have discussed and found out which is the best insolvency option for you then an official form needs to be filled to commence the case. These legal forms are also known as schedules. When filling them you need to give out information regarding your recent financial status. If your are filing for Chapter 13 bankruptcy then your lawyer will inform you that you will have to provide a plan stating how you will be repaying to the court. Once your case is filed, the creditors will not be able to harass you any further as an “ Automatic Stay” order comes into effect.
