For a businessman to declare bankruptcy is probably the most embarrassing feeling. However if such a situation arises, it is always better to go about it in an objective manner and get it over with. With the economic situation of the country still recovering from the credit crunch blows, there are many individuals as well as partnership firms filing for bankruptcy. In this regard, for the legal as well as the state bodies to exercise better governance the US government has introduced BAPCA which is the short form for ‘Bankruptcy Abuse Prevention and Consumer Protection Act’.
This is an act which is designed to protect the interests of both the creditors as well as the debtor. Under this act the individual who is supposedly filing for bankruptcy is required to take a means test. This is the test which determines whether or not the individual qualifies for chapter 7 filing under the US bankruptcy code. If the individual does not pass this test then he is instructed to file bankruptcy under chapter 13 of the US bankruptcy code.
There are both chapter 7 and chapter 13 bankruptcy forms that are available. Now these forms can be filled and submitted online too. In fact this is one of the most important steps to filing bankruptcy. Filing for bankruptcy is more often than not the last resort. If all other doors to clearing debt are closed the person has to declare bankruptcy. That said filing for bankruptcy is not an easy affair. It requires the person going ahead with the filing to possess a good amount of knowledge about the legalities involved. This is the reason why many people consult a lawyer before filing for bankruptcy.
Consultation with the lawyer is among the first steps to filing bankruptcy. The lawyer after studying the individual’s case will advise him to start filling chapter 7 or chapter 13 bankruptcy forms. The step that follows legal consultation is the actual filing. If the person filing for bankruptcy does not possess any non exempt assets then he is qualified to file bankruptcy under chapter 13. On the other hand if the person is found to be holding no assets then after thorough analysis his debts are discharged as per the rules of the chapter 7 mandate.
The US government encourages people to pay off their debts in a timely manner and this is the reason why BAPCA makes it extremely difficult for a person to pass them up, giving him the right to file under chapter 7. The person who qualifies for filing under chapter 13 must fill the chapter 13 bankruptcy forms and pay off the debt to his creditors in a time frame of three to five years depending upon his capacity to repay the debts. As mentioned earlier, now one can file for bankruptcy using online resources. There are many sites which help the individual to get acquainted with the steps to filing bankruptcy and also provide the necessary information to facilitate the process.
