Category Archives: bankruptcy

When your faced with mounting debts you are unable to repay or when you are behind with the mortgage and foreclosure is looking or the phone calls from people looking for payment never stops, declaring yourself bankrupt may be a solution. Or is it? Read on to learn more.

If the key is the elimination or reduction of debts bankruptcy may permit you to keep the bill collectors away and save your residence but there are serious things to take into account. You may find it tough to get a loan in the future because of the negative impact on your credit score as well as increased insurance rates and in certain circumstances can make obtaining a job fraught with difficulty. Consider the following:

• You can escape overwhelming debt by a declaration of bankruptcy, but the results of those actions may last many years
• Chapter 13 and Chapter 7 bankruptcy remain on your credit history for seven and ten years
• You may want to contact those you owe monies too prior to filing for bankruptcy to see if there is room for negotiation. For example, there are often programs offered by lenders for those who fall behind on mortgage payments

Bankruptcy Types

• Chapter 7 bankruptcy also known as a liquidation or straight bankruptcy. A court appointed trustee may sell some of your property and pays those you owe from the creditors and then the debts are discharged. There are exceptions from liquidation, for example, your clothing, your vehicle, the tools of your job, your household property, equity in your home and pensions.
• Chapter 13 bankruptcy is where a plan approved by a court to make repayments on all or a part of your debt owed over a time period of three to five years. It is also possible to get some debts discharged. You may keep your home as asset liquidation is not mandatory, but payments on the home must be maintained.
• With both kinds of bankruptcy some debts cannot be discharged, Examples include alimony, certain tax payments, student loans and child support.

Bankruptcy Consequences

You can only file for bankruptcy during certain periods, For example, Chapter 7 bankruptcy can only be filed once every eight years if you have had your debts discharged. It can also have an extremely negative impact on your credit score.

Do You Need A Lawyer?

You can file for bankruptcy without the services of a lawyer. However, it is not a simple process and most people commend the services of a lawyer to help navigate the intricacies of the process.

When To File?

Bankruptcy offers a fresh start, but a good ending is by no means a certainty. Make sure you explore all other avenues of approach before committing to the process. By using credit with caution in the future and ensuring bills are paid before or when they are due, you can restart the building of your credit once more.

Source: https://www.investopedia.com/articles/personal-finance/100714/when-declare-bankruptcy.asp

You can obtain a new financial start with bankruptcy, but it is a matter to be taken seriously. Understanding the decisions, you make may have consequences is especially important before you commence bankruptcy.

Long Time Effects

When you apply for a loan of $150,000 or more, your bankruptcy will appear on your credit report for longer than the standard ten years. How this impacts your credit will be determined by your credit status prior to filing. If your credit was poor it will not matter as much, if it was good, it may cause a severe decline in your credit score.

Sometimes bankruptcy can help you improve your credit score more rapidly than people who do not file for bankruptcy. By addressing your debt to income ratio, paying bills on time, and developing a positive financial outlook as opposed to not filing and mounting up late payments, repossessions, and delinquencies.

Mortgage And Car Loans

You will have to wait for a while when you have filed bankruptcy to obtain a car loan or a mortgage and more than likely you will have higher interest rates to pay on the loan.

Bankruptcy Discharges

Usually:

• When completing a Chapter 7 Bankruptcy you cannot get another for eight years.
• When completing a Chapter 7 Bankruptcy you cannot obtain a Chapter 13 Bankruptcy for four years.
• When completing a Chapter 13 Bankruptcy you can’t get a Chapter 7 Bankruptcy for six years.
• When completing a Chapter 13 Bankruptcy you cannot get a Chapter 13 Bankruptcy for two years.

This may cause issues in the future. For example, if you declare Chapter 7 Bankruptcy and fall on hard times, you cannot file again until the time limits have expired.

Non-Dischargeable Dates

Not all debts can be discharged in bankruptcy, such as:

• Recent tax debts.
• Student Loans.
• Alimony
• Child Support.

Source: Nolo. What Is the Downside of Filing for Bankruptcy? 4 Sept. 2014, www.thebankruptcysite.org/resources/bankruptcy/filing-bankruptcy/what-is-the-downside-in-filing-for-bankruptcy.

While it may be thought that bankruptcy is the final stage before economic ruin, it is not always so – Chapter 13 of the federal bankruptcy code can ease some of the financial stress. If you can repay some or all of your creditors – it may be possible to avoid liquidation. And it is ideal if your primary issues are dealing for payment straight away from creditors versus having sufficient income. Another appealing aspect of Chapter 13 bankruptcy is you may not have to lose your home. Read on to learn more.

Chapter 13 bankruptcy permits individuals to have between three and five years to complete resolution of their debts by the means of applying all of their income that is considered disposable to the reduction of the debts. This option incorporates allowing an individual the option of eliminating the unsecured debts while they catch up of mortgage payments that were previously not met. Undoubtedly to many people keeping their home is of primary significance. But the downside is you will spend some years with a trustee appointed by the court, who will be responsible for collecting payments from you and then distributing them accordingly.

How does Chapter 13 Bankruptcy Work?

Chapter 11 bankruptcy (that applies to businesses) has some similarities to Chapter 12 bankruptcy. In both scenario’s the petitioner has to submit a financial plan of reorganization that safeguards assets from foreclosure or repossession and in normal circumstances requests forgiveness of other accrued debts. They both have little in common with Chapter 7 bankruptcy where all available assets are liquidated with the exception of certain assets that may have exemption from liquidation.

Not all debts are eliminated when a person files for bankruptcy. Payments that cannot be discharged include alimony payments as well as child support, taxes that have not been paid and outstanding student loans. However, Chapter 12 bankruptcy can eliminate other debts that may be outstanding, but it will be highly likely the individual has many issues with borrowing money in the future from financial institutions.

Here is a breakdown of the financial figures to be eligible for the filing of a Chapter 13 Bankruptcy. Note, these figures can change as they are adjusted from time to time to be in line with the current consumer price index figures.:

• A person may have no total amount greater than $394,725 in debt that is unsecured such as personal loans or credit card bills.
• An individual may have no total amount greater than $1,184,200 in debts that are secured including auto loans and mortgages.

Regarding your home, filing for Chapter 13 Bankruptcy puts a suspension on outstanding proceedings for foreclosure and payment of other debts that may be owed. This will obtain you time while your plan is under consideration from the courts. However, it does not mean the debt is automatically eliminated. Ideally, the plan for bankruptcy will make enough of your income available to make mortgage payments on a regular basis so you may retain your home.

The Chapter 13 Bankruptcy Process

The first order of business is to discover a bankruptcy attorney. They usually offer a free evaluation and an estimate of the costs to file and commence the process. There is a fee of $235 payable to the bankruptcy court for filing as well as $75 for administrative costs. The following is also required:

• A list of the claim amounts and the names of creditors.
• The debtors income and sources need to be disclosed.
• The debtors property needs to be listed as well as all leases and contracts held in the name of the debtor.
• The monthly living expenses of the debtor.
• The debtors most recently filed tax return as well as a statement if there are taxes that have not yet been paid.

A petitioner for Chapter 13 Bankruptcy cannot have had a dismissal of a bankruptcy petition dismissed within the previous 180 days before filing due to the unwillingness of them to make an appearance in court. The applicant must also go to an approved agency for credit counseling within 180 days of the petition being filed.

Very soon after, a repayment plan must be submitted by the debtor. An administrator or bankruptcy judge will instigate a heating and make a determination to decide if the plan is fair and meets the requirements of the bankruptcy code. There may be objections from creditors, but the final determination resides with the court.

Delinquent payments can be addressed by the debtor making the payments up over a period of time, but Chapter 13 rules state all new payments for mortgages at the time of filing for bankruptcy must be made on time, henceforth.

A trustee or mediator must also be worked with as they will be responsible for the distribution of monies owed to creditors. Under Chapter 13 Bankruptcy, it is not mandatory for a debtor to directly contact their creditors. And if all the agreement terms are being abided by, it is required by law that creditors stop efforts to recover the debt they are owed. That said you must never fall behind on mortgage payments. Late payments are not permitted on monies owed. You are permitted to increase your payments so the agreement may be discharged sooner. On the other hand, if your financial situation becomes worse, you need to let the trustee know and establish whether the plan can undergo a modification. If the terms of the agreement are not met may result in the bankruptcy claim being dismissed in court.

Qualifications For Chapter 13 Bankruptcy

If you can prove you have the income to address your debts, you meet eligibility to file. The individuals sources of income must be disclosed and submitted to the court within fourteen days of the petition being filed. Income can include payments from Social Security, pensions, royalties, money from a property sale or rents as well as compensation for unemployment. Your tax filings need to be current and you will have to show evidence of federal and state tax filings for the previous four years. When you cannot meet this, your case will be delayed until you meet this requirement and will be dismissed if you cannot produce the documentation.

From there, the bankruptcy court’s role is to overlook the income statements and debts, arrange meetings with people to who monies are owed and then decide on a hearing date with the purpose of ascertaining if the plan will be acceptable. On the completion of repayments, usually between three to five years, the Chapter 13 case can then be discharged, ending the process.

Source: https://www.debt.org/bankruptcy/chapter-13/

Every profession has great, good, and poor practitioners and lawyers are no exception. We have all heard about lawyers who appeared to have no clue (as illustrated in popular culture by Lionel Hutz, Attorney at Law, in “The Simpsons”) but there are also lawyers who are hugely talented. It should go without saying they are the ones you should aim for. Read on to learn more.

Experience

Do years count? Not always! An attorney may have practiced bankruptcy law for a quarter of a century but never really mastered the intricacies of the law. Similarly, although they may have twenty plus years great experience in certain fields, bankruptcy may not be one of them and it is more doubtful they will have the skills you require. You need to seek out a lawyer who has ample experience in small business and consumer bankruptcy law – an attorney who has the respect of his fellow professionals, including judges.

Training

Once an attorney has graduated from law school and passes the state bar examination, it really can be said their learning is just commencing. In essence, that’s why its called the “practice of law” in that a lawyer is always learning.  Attorneys prime their established skills with educational seminars. Education is absolutely essential with the totally different bankruptcy laws. Older concepts just do not apply any longer. Even the most skilled attorney cannot master the subject simply bey reading up on it. There are organizations that conduct continuing education and seminars like the American Bankruptcy Institute (“ABI”), the  National Association of Consumer Bankruptcy Attorneys (“ NACBA”), and various bar associations.

Listening

You need an attorney who will listen to you before they tell you what you should be doing. A one-size-fits-all method is not suitable when it comes to the dispensing of legal advice and never more so than when it does not deal with the issues that need addressing. It is vital you find an attorney who is willing to listen to the facts of your situation and ask the questions they need too so they are fully able to comprehend the particular circumstances of your case. Above all, they must listen to what you have to say and then review the facts within the context of existing law. This is the only way they can give you the finest advice.

According to NerdWallet, one of the best ways to find a bankruptcy attorney is to “seek personal referrals from friends or family or your own attorney.”  With today’s technology, another good way to find one is through the internet and various online review sources.

Source: “How to Find a Good Bankruptcy Lawyer.” NACBA, 18 Aug. 2015, www.nacba.org/what-we-do/consumer-assistance/how-to-find-a-good-bankruptcy-lawyer/.

The average cost of bankruptcy is between $1,500 and $4,000 when combining fees both the court and the attorney. Read on to learn more.

The Cost Of Bankruptcy

There is not a simple answer. While the court fees are established set fees, the cost of an attorney can differ of many factors such as who you choose to hire, your location and whether your case is simple or complicated.

Filing Fees

Chapter 7 Total Filing Fees: $335

• Filing fee: $245
• Administrative fee: $75
• Trustee Surcharge: $15
• Re-opening a Chapter 7 filing: $260

This is not an actual quote. If you need an experienced bankruptcy lawyer contact Canterbury Law Group to start your initial consultation.

Chapter 13 Total Filing Fees: $310

• Filing fee: $310
• Administrative fee: $75
• Re-opening a Chapter 7 filing: $235

Using data collected by the American Bankruptcy Institute between 2005 and 2009 shoed $1,072 to be the average price of a Chapter 7 bankruptcy with assets. Prices varied primarily by location. The high end was $1,530 in Arizona all the way down to just less than half ($781) in some states. The same study states that for a Chapter 12 bankruptcy the average cost was $2,564. North Dakota had the lowest costs at $1,560 all the way up to $4,950 in Maine.

With such price variance, let’s look at some of the reasons for this:

• Some of your debts are  non-dischargeable debts such as unpaid taxes, alimony, child support and student loans
• You have varied income sources
• You exceed your state’s median income threshold for your household size
• Trying to prevent a legal action such as a foreclosure filing against your property, a bank levy or loan that served as collateral for a current debt
• A bankruptcy filing in the previous eight years
• Having many individual creditors
• Filing for both a personal and business bankruptcy
• When you face accusations of fraud that may be proven correct.

In cases of Chapter 7 bankruptcy is standard practice for attorneys to insist on payment before services are rendered. Payment plans may be an option, but they will not go forward unless payment has been forthcoming. This means additional vulnerability to creditors as you try to obtain the money for the fees going to your attorney.

Attorney Costs In Your Area

It is very likely fees may have increased since the study we quoted. In Chapter 12 bankruptcy cases, the attorney’s fees will be reviewed by the judge unless they fall beneath what is a baseline in the state when the case is being foiled. You can meet with several attorneys and their fees are public record and can be accessed through the federal PACER website. There is a small charge for this service, but it may save you a great deal of money!

Generally, in larger cities and metropolitan areas the charges will be greater because the general cost of living will be higher in those communities. Also, lawyers with many years of experience in this field are far more likely to charge more than those with lesser experience. Also, think about how complicated your case is. If your case is a simple one, a less expensive lawyer may work out fine, however the more complex the issues are, the more experienced a lawyer you will want to have on your side. This would also apply if one major reason for your bankruptcy is medical debt.

Education Courses

There is a 450 fee for the two credit counseling courses you must undertake if you are filing for either Chapter 7 or Chapter 13 bankruptcy. A nonprofit credit counseling agency must be the ones to hold the course and the Office of the U.S. Trustee sets the fees that top out at $50 and go all the way down to free, depending on your circumstances. The course may be taken online or in person.

Saving Money On Costs

Obviously, some cases of bankruptcy are more burned with debts that are unmanageable than others. Either way it is essential to fully document your entire financial situation before you approach a bankruptcy attorney. You may be able to obtain a fee reduction if you are elderly, disabled or a low-wage earner. An attorney can help on these areas as well as us there are other mitigating factors that are relevant, an attorney may be willing to discuss lowering their fees.

Remember in Chapter 7 bankruptcy cases, attorneys will want their fees paid upfront and in Chapter 13, they usually demand a set amount of the fee to start with and will obtain the rest through the bankruptcy plan the court orders.

Consider how long it takes to recover from bankruptcy. In the case of Chapter 7 bankruptcy, although it may be a success, it may be up to ten years before it disappears from your credit report. It is true that Chapter 13 bankruptcy may do less damage, but it involves sticking resolutely to a payment plan for a period of three to five years, even if the court does help by reducing the amount of your debts.

There is always the option of filing the bankruptcy yourself however there may be some considerable consequences for doing so. If you do run into trouble or forms are filled out incorrectly or in error, your case may be dismissed and that will generate additional expense as well as having to start over once more.

Paying For Bankruptcy

You will also need to consider how you are going to pay for your bankruptcy. Legal fees are often a headache to deal with, but you will also face court costs as well as the fee for the statutory credit counseling. You may be looking at a total bill of several thousands of dollars when all is said and done.

Other avenue for obtaining the needed money include:

• You may wish to put a temporary hold on credit card repayments and sell off some household assets for cash to raise the fees.
• If you earn less than 150% of the poverty income level for your state you may qualify for reduced or a pro bono legal assistance or help from the Legal Aid Society.
• Find a bankruptcy lawyer who will work with you on a pro bono basis but some of the law firms they represent will insist on between ten and fifteen percent being on a pro bono basis.
• File under Chapter 13 instead of Chapter 7. As lawyers can incorporate their fees into your repayment plan.

Source: “How Much Does It Cost to File Bankruptcy: Filing Fees and Attorney Fees.” Debt.org, 11 Feb. 2020, www.debt.org/bankruptcy/cost/.

The path of Chapter 7 bankruptcy is well-established and should progress without unforeseen difficulties. Read on to learn more about what is involved with our overview of the procedures to follow.

Debt Analysis

Remember some debts cannot be discharged in Chapter 7 bankruptcy such as child support obligations, the majority of student loan balances, recent tax debt and child support obligations. If collateral has been pledged for a debt, if you are not current when you file for bankruptcy, the creditor may take the property, if you are not current following your case.

Property Exemptions Determinations

Every state has certain exemption laws statin the property types you can keep under Chapter 7 bankruptcy, For example, the majority of people can keep their retirement accounts, house furnishings, a reasonable car and some equity in a home. You will want to ensure what you can protect prior to filing.

Eligibility

The majority of people must take and pass a means test before they can qualify for a debt discharge in Chapter 7 bankruptcy (Some individuals include people whose debt is primarily from a business as well as some personnel from the military.) When your gross income is more than the median income for a family of your given size in the state where you reside – you may not qualify. If it is less, you will. Should you not qualify, toy will take the expenses allowed from the income to decide whether you will be permitted to utilize Chapter 7 bankruptcy.

Redeeming Or Reaffirming Secured Debts

If you want to keep a property you have pledged collateral on for a loan, you will need to keep paying the creditor if you wish to retain the property. When filing for bankruptcy you will decide if you want to redeem the property (by paying off the creditor is a lump sum payment) or reaffirm the property – usually meaning you agree to continue paying the creditor under the current terms. A third option can be to surrender the property, allowing the creditor to take it. If you live in certain areas, there may be other options available as rules do differ from state to state.

Filling Out Bankruptcy Forms

Although you will have to fill out forms that are several dozen pages in length – the yare important because they tell the court about your debts, property, expenses, incomes and previous transactions. You will also list your creditors as well as your property exemptions and make decisions regarding any secured debts you have. Lastly, you will disclose any property transactions occurring in the previous ten years prior to your bankruptcy case.

Credit Counseling Course

A credit counseling course is mandatory for individuals wanting to file for bankruptcy. Very occasionally it may be done, shortly after filing for bankruptcy.

Filing The Forms

Your case gets officially under way when you file your petition. The majority of people file all the forms at once, but if time is of the essence there is an option for emergency filing.

Filing Fees And Fee Waiver Requests

When you file the necessary forms, you will pay a fee for filing. You may request the court to split the payments into quarters if you cannot afford the filing fees up front. If you cannot pay at all, you will need to apply for a waiver of fees by filling out the fee waiver application and presenting it with your bankruptcy petition. A judge will then make a determination but the income or your household may not exceed 150 percent of the federal poverty guidelines.

Document Submission

The bankruptcy trustee will require documents that show evidence of the information you supplied in the bankruptcy filing forms. Expect to send along paycheck stubs, tax returns, bank statements, profit and loss statements,

Meeting Time

Usually you will only need to attend a single meeting at the court with a trustee. The trustee will verify your identification and will ask the standard questions that are needed to be answered by all debtors as well as specific questions relevant to your case. It is possible a creditor or two or more, may appear but this is not usually the case.

Filing of Objections And/Or Motions

If you want to dispute acclaim from a creditor or you are seeking the elimination of certain liens – you will need to tackle these matters before the closure of your bankruptcy case. However, if you overlook a lien, the majority of courts will allow you to revisit the case at a later time.

Winding Up Secured Debts

In your bankruptcy forms you explained how you would handle debts that have been secured. These matters will have to be addressed before your case can be closed. For example, if you promised to return a car to your lender you have to make sure said car is available.

Debtor Education Course

Once paperwork has been filed you will need to complete a debtor education course before your discharge can be obtained. You will not get a discharge if you fail to file the certification showing you have completed this course. This may become a major expense as you will likely have to a file another motion as well as an additional filing fee so the case can be reopened.

Discharge

When a successful bankruptcy has been completed the court will issue an order that will discharge all of your debts that qualify. Once this happens, you no longer are under a legal obligation to pay the debt and the there is no legal approaches the creditor can make to obtain payment.

Source: O’Neill, Cara. “Filing a Chapter 7 Bankruptcy: Basic Steps.” Www.nolo.com, Nolo, 12 Nov. 2014, www.nolo.com/legal-encyclopedia/chapter-7-bankruptcy-29454.html.

The purpose of bankruptcy is to find a way forward with people who have large amount of debt while treating their creditors in a fair and equitable manner. The debtor often sees this process as a “fresh start” without the specter of looming bills.

Chapter 7 Bankruptcy

When you agree a trustee can take and sell some assets and/or property to pay back debt in exchange for wiping away the debt that qualifies for Chapter 7 Bankruptcy. You can also maintain property that is exempt and protected by state law.

This “fresh start” wipes out debts such as medical bills, personal loans and credit card balances taking a streamlined approach without the demands of a monthly plan for repayment. For this to happen the debtor must agree the person appointed as the bankruptcy trustee can sell what is known as non-exempt property. The proceeds are then sent to the creditors according to a system to rank their priority.

It is not needed for the debtor to relinquish all their assets. What you need to maintain your home and continue working, with a reasonable vehicle. Often the debtor may keep all of their personal property but what can be kept does differ from state to state.

The following is considered non-dischargeable debt under Chapter 7 Bankruptcy:

• Student loan debt unless I can be demonstrated it would be incorrect to repay
• Awards originating from wrongful death or injury from being intoxicated while operating a vehicle
• Unpaid income taxes accrued over the last three years (and in some cases longer)
• Child support, spousal support and obligations for domestic support

Both individuals and businesses can utilize Chapter 7 Bankruptcy and the process usually takes between four to six months to complete.

Eligibility

You will not be able to file a Chapter 7 Bankruptcy is most of your debt is consumer debt and you have sufficient income to finance a Chapter 13 plan for repayment. You can also only do this once every eight years.

Property

As we said above you can keep what you need to maintain your home and continue working, with a reasonable vehicle. Often the debtor may keep all of their personal property but what can be kept does differ from state to state.

Secured Debt

You will have the option of allowing the creditor to repossess a secured debt or to maintain ownership of the property as well as maintaining the payments as per the sales contract.

Non-dischargeable Business Debt

Business debt is not wiped out in Chapter 7 Bankruptcy. Other than sole proprietors it is seldom a business will even file for this kind of bankruptcy as there are easier ways to wind down a business enterprise. When assets need to be sold in a manner that is transparent it may be a good option, however.

Chapter 13 Bankruptcy

This form of bankruptcy helps high-income earning individuals reorganize their debt. With this form of bankruptcy. Although you can retain your property, creditors must be repaid as part of a three to five-year Chapter 13 Bankruptcy plan as well as any income that is discretionary going towards the total owed as defined by the rules of bankruptcy.

Repayment

You will have to propose a plan for repayment detailing your debts for the last three to five years and how you intend to pay them. The minimum amount for this is based on how much you earn, how much you have to repay as well as how much is owed and the value of your property that is non-exempt.

Debt Limitation

The maximum limit for secured debt is $1,257,850 and no more than $419,275 in debt that is not secured.

Mortgage And Car Payment Arrears

Chapter 13 Bankruptcy can also be used to pay car and house payments that have fallen in arrears to avoid both repossession and foreclosure.

Other Bankruptcy Reorganization Options

There are two other options known as Chapter 11 Bankruptcy and Chapter 12 Bankruptcy. Chapter 11 bankruptcy is normally used by businesses to reorganize their financial affairs when they are struggling to survive. Individuals whose total debt exceeds the amount offered by Chapter 13 Bankruptcy can also file for Chapter 11 Bankruptcy. Chapter 12 bankruptcy has similar qualities but a minimum of 80% of your debts must be from running a family owned fishery or farm. To pursue this form of bankruptcy, speaking to a lawyer is essential.

Source: O’Neill, Cara. “What Is Bankruptcy?” Www.nolo.com, Nolo, 23 Nov. 2016, www.nolo.com/legal-encyclopedia/chapter-7-13-bankruptcy-basics-29829.html.

People often ask us things like “Who Pays for Bankruptcies” or “Can I afford Bankruptcy.”  The Fact is, if you are asking yourself those questions, you probably should consider one more question: “Can you afford not to file Bankruptcy?”.

Financial relief can be obtained by people who find themselves with a lot of debt through bankruptcy protection. A fresh start can help get your life on the rails again by filing Chapter 7 bankruptcy. But there are costs involved. The actual cost of a Bankruptcy can be minimal when compared to the savings in debt that can be eliminated.

Bankruptcy Fees And Payments

When filing bankruptcy, there are three main components to the total you will pay:  (i) Debtor’s Education Courses;  (ii) Court Filing Fees;  and (iii) Lawyer’s Fees.

• Debtor’s Education Courses – There are two courses.  The First must be taken prior to filing Bankruptcy.  The Second one comes after the 341 Meeting with the Trustee.  Fees usually range from $10 to $50. If this is not affordable, it many be possible to get those fees waived;
• Court Filing Fees – The actual fee varies with the type of filing.  Currently $335 is the cost to file for Chapter 7 Bankruptcy, and $310 to file for Chapter 13 Bankruptcy;
• Lawyer’s Fees – Lawyers obviously charge for their time, but the majority of consumer Bankruptcies are based on a flat fee basis. Therefore, you will know the cost to pay at the start of the proceedings.

Paying For Bankruptcies

Normally the person who is filing for bankruptcy is responsible for the payment of Court Fees but people who earn less than 150% of the federal guidelines for poverty can request to have the fee waived. In those circumstances, the Bankruptcy Court absorbs all the related expenses so a person can be in a position to be successful in their Bankruptcy Case. Obviously, this places a financial burden on courts, they only grant fee waivers when it is obvious the person cannot afford the filing fees including when the case has been filed and the debt no longer has to be attended too.

If you are fortunate enough to have the court filing fee waived, it is likely you also will be able to obtain waivers for Debtor’s Education Courses. Likewise, if you fall under the poverty guidelines level, you likely will be able to find voulenteer or “Pro Bono” legal representation for free or a reduced cost.

Source: “Does The Government Pay for Bankruptcies?” Upsolve, 30 Aug. 2019, upsolve.org/learn/who-pays-for-bankruptcy/.

People often think bankruptcy is where you turn too when no other options are on the table. Some see it as a second chance to rebuild finances within the confines of certain laws, while others see a stigma to bankruptcy that will haunt you as a failure, forever. The purpose of bankruptcy laws is not to be punitive but to help people obtain a restart to their finances. Whatever you choose, read on to learn more.

Reasons For Considering Bankruptcy

Medical debt and job loss are often quoted as the most frequent factors in driving bankruptcy but others include:

• A divorce
• Creditors who are suing because of unpaid debts
• Your home is in danger of being foreclosed
• Your only spending is with a credit card
• One credit card is utilized to pay the balance of another
• Looking at a 401K withdrawal to cover bills

Things To Consider

If you have enough resources bankruptcy can be avoided. Think about the following:

• Non-profit credit counseling agencies can help with a gratis service examining your finances and weighing up the possibility of a debt management program, maybe even a debt settlement or consolidation loan
• Making a monthly budget and living within it may be a great help as would obtaining a second job or selling some possessions to meet bills
• Is it possible to negotiate the debt?
• Is the current financial situation permanent or are things shortly to improve or worsen?

One last thing to consider: you may want to hold off committing money to a large bill or series of large bills that are upcoming until you have make a determination as to whether bankruptcy is the way forward, as it is possible, some of those bills may be dismissed.

Qualifying For Bankruptcy

There are two primary forms of bankruptcy for individuals:

Chapter 7 bankruptcy suits individuals who earn less than the median income for a family of your size in the state you reside in. If your income is too high, you may try and qualify for a ”means test.” In this situation a court trustee looks at your income and expenses to make a determination as whether these bills can be paid or do you really require the relief offered by a Chapter 7 bankruptcy.

Chapter 13 bankruptcy requires you have a steady and established income source as well as unsecured debts totaling less than $394,725 and secured debts totaling less than $1,184,200.

In Chapter 7 bankruptcy debts that can be wiped out include:

• Medical bills
• Credit card debt
• Lawsuit judgments
• Personal loans
• Obligations from contracts and/or leases

Chapter 13 bankruptcy includes the above as well as:

• Debts for loans from a retirement account
• Debts from divorce with the exception of support payments.

Debts that cannot be wiped out in either Chapter 7 or Chapter 13 bankruptcy include:

• Alimony
• Child support
• Student loans
• Debts for personal injuries causes when you were driving intoxicated
• Any outstanding court fines or penalties
• Debts owed to governmental agencies

How Bankruptcy Can Impact You

Make no mistake, bankruptcy will have a considerable impact to your life. Here are some of the ways it will change the status quo.

Private Life

Your name will go public and may appear in the legal notices section of your local newspaper or if they are read out by a local media operation. Anyone who has an account known as Public Access to Court Electronic records) will also be able to see this and the meeting (which is mandatory) with creditors happens in a public forum and will also be marked on your credit report.

Credit Score

You can expect a drop of anywhere between 100 to 200 points from your credit score and Chapter 7 bankruptcy will remain on your credit report for ten years, and seven years in the case of Chapter 13 bankruptcy.

Co-Signers

A co-signer on a loan will stay be responsible for the payment of aid loan even when the bankruptcy has been successful. However, Chapter 13 bankruptcy extends to co-signers as long as regular payments are made on your Chapter 13 agreement.

Bankruptcy And Your Home

It is essential to maintain payments on your home should you not want to lose it. A fresh start is a lot easier to capitalize upon when you are not homeless. But if you cannot afford your house it is very likely you will lose it. If you are in Chapter 7 bankruptcy you may be able to file for Chapter 13 bankruptcy, hence allowing greater time for you to catch up on house payments or the inevitable result is foreclosure. In Chapter 13 bankruptcy, you would return to your previously default status so your creditors can once again pursue you for payment.

Will Bankruptcy Help?

Although we cannot tell give you a yes or no answer to that questions we would ask you to consider the following: If in the next five years it will be impossible to get out of debt and you have diligently and thoughtfully researched the opportunities you may and may not have – then bankruptcy may be of benefit to you. One other thing to consider, we no longer have debtors prisons, you cannot go to prison for owing someone money.

Source: Should I File For Bankruptcy? – Do You Qualify & What Will Be The Impact https://www.debt.org/bankruptcy/should-i-file/

If you are looking for information about the different types of bankruptcy, this post should help

Understanding Chapter 7 Bankruptcy

In Chapter 7 bankruptcy you will do the following:

• Pay your secured debts or relinquish proeprty to be liquidized and the proceeds go to pay your secured debts.
• Non-exempt proeprty is surrendered so as much of your debt can be satisfied as possible.
• You keep possession of other exempt property and are released from the accrued obligations from the remaining debt that is dischargeable.

In Chapter 7 bankruptcy is a good option if you do not have the income or the assets to pay off at least part of your debts. A formula is used and if your income exceeds a certain level, you will need to file Chapter 13 Bankruptcy.

Learn more about Chapter 7 Bankruptcy

Understanding Chapter 13 Bankruptcy

In Chapter 13 Bankruptcy you will do one (or maybe a combination of) the following:

• Rid yourself of multiple debts so payments can be managed.
• Taking into account your income, restructure existing debt payments to make them more manageable for your personal circumstances.

The two most important considerations the judge and the Trustee will take into account when they make a decision to accept your proposed bankruptcy plan are:

• Will each creditor receive at the very least as much revenue if you  had filed a Chapter 7 bankruptcy?
• Whether all creditors are being treated with a degree of fairness?

In Chapter 13 bankruptcy, the goal is usually to get your creditors to agree with a plan of action. They may try to get their money faster or obtain more money from you. Creditors do not have to agree with your plan but it will influence the judge and Trustee more favorable if they will agree. Regardless of whether they agree or not, the judge may approve the plan so long as the judge determines the creditors are being treated equally and they will obtain at a minimum, the same amount as they would have been paid under Chapter 7 bankruptcy.

Learn more about Chapter 13 Bankruptcy

Deciding The Correct Type Of Bankruptcy

Ultimately your bankruptcy filing will come down to just two things, income and assets.

Your income may prevent you from going through Chapter 7 bankruptcy, not to mention the high risk of losing most of your assets in this form of bankruptcy – however, assets that can be protected in Chapter 13 bankruptcy.

Let’s look at some scenarios where Chapter 7 or Chapter 13 bankruptcy are the best options.

Chapter 7 Bankruptcy – An Unemployed Debtor With Few Assets

In a situation where the debtor has no current income aside from unemployment benefits and has a single car with a loan against it and does not own a home or any other property – Chapter 7 bankruptcy is by far the quickest and efficient means of eliminating debt. This case is so common it is frequently known as a “no asset bankruptcy.”

Chapter 7 Bankruptcy – An Unemployed Homeowner With An Upsidedown Mortgage

If you are a homeowner and the value of your property is now below the value of the loan on the property, Chapter 7 bankruptcy may still be the best option. As the lien will have greater value than the property, the homeowner has zero equity in the estate of the bankruptcy – the house is protected from the risks of liquidation.

Chapter 7 Or Chapter 13 Bankruptcy – An Unemployed Homeowner With Significant Equity

Chapter 7 bankruptcy may not be best for an unemployed homeowner who has large amounts of equity in their property. In chapter 7 bankruptcy, the homeowner may lose their home. But if they keep up the mortgage payments, the homeowner can maintain their home in a Chapter 13 bankruptcy. However, the petitioning household must demonstrate they have enough income to fund a debt payment plan.

Chapter 13 – Homeowners Confronting Foreclosure or Mortgage Delinquency

Chapter 13 bankruptcy gives homeowners who are behind on their mortgages a method of catching up mortgage payments that are past due and at the same time ridding themselves of part of their dischargeable debt. This way it is possible to ensure their home is safe from foreclosure and get rid of medical debt, 2nd or 3rd mortgages and credit card debt. There is not a way to make up mortgage arrears in Chapter 7 bankruptcy.

Chapter 11 – Wealthy Pensioners With A Large Accumulation of Debt

It is very often the case wealthy debtors have to file under Chapter 11 bankruptcy simply because there are limits to the income and debt levels in Chapter 13 and Chapter 7 bankruptcies.

Sources

1. “Types of Bankruptcy.” Legalzoom.com, 30 Sept. 2015, www.legalzoom.com/knowledge/bankruptcy/topic/types-of-bankruptcy.
2. Nolo. “Which Type of Bankruptcy Should You File? Chapter 7 vs. 13.” Www.alllaw.com, Nolo, 12 Mar. 2019, www.alllaw.com/articles/nolo/bankruptcy/which-type-chapter-7-chapter-13.html.