The base belief held in bankruptcyi law is that if you are generally an honest person but have gotten in over your head and no longer have the ability to repay the debts that you owe, you should be given a chance to make a fresh start. This is done by discharging your debts via a bankruptcy proceeding.

I am a co-signeri for a debti, how does bankruptcyi affect my obligation?

If the debt is a dischargeable debt then you will not have to pay it. However, the cosigner will become primarily responsible for the debt. Be sure to list the co-signer as a creditori in your schedules as they have a contingent claim against you.

When making financial decisions during the process, you should consult your attorney. In particular there are three items worth mentioning:

• Under bankruptcyi law, certain luxury purchases over $1000 within 60 days of the bankruptcy filing are presumed non-dischargeable.
• Under bankruptcy law, cash advances aggregating $1000 within 60 days of the bankruptcy filing are presumed non-dischargeable.
• Debts involving materially false financial statements are non-dischargeable under certain circumstances.

If you file the bankruptcy yourself, you must fill out the forms. There are several forms. There could be between 30 and 60 pages in your petition, schedule and other papers filed at the time of your bankruptcy. You must follow the local and federal bankruptcy court rules in completing the forms. Preparing these forms requires an understanding of both bankruptcy law and local state law in order to enter the information correctly and accurately. The forms have to be typed and a certain number of copies must be included with the filing. Today, most attorneys use a computer system to prepare these forms because of there complexity and voluminous nature.

An often asked question is, "What will happen to my house if I file bankruptcyi?" Depending upon which exemption scheme is selected and your circumstances, you may exempt up to $100,000 in equityi. When calculating your equity you should with a forced liquidation price as opposed to the ideal selling condition price to arrive at a value for your home. Once you know that value, subtract the amount owed and any selling and transfer costs to determine the equity. In a depressed market, liquidated properties are often valued much less than what we would like to think the property is worth.

Once you file bankruptcyi, all of your property at the time of the filing and certain other property to be received in the future, becomes the property of the bankruptcy estatei. This means that the bankruptcy trusteei will take control of this property for purposes of satisfying your creditors. However, there is certain property which is either excluded or exempt and the debtor will be able to keep it. Property or asseti exemption are determined based upon your situation, income and the laws of your state. The best way to determine which property to keep requires a detailed analysis of your situation.