Bankruptcy Basics
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The statistics for the year 2010 indicate over 1.5 million people filed bankruptcy. This statistic is staggering; however, it is expected. The average consumer has $12000 in credit card debt. Most people do not live within their means and have little money saved. Unfortunately, many people have lost their jobs or are struggling to pay their mortgage. This has caused millions of people to default on credit card payments. Filing For Bankruptcy is the only option for debt relief for millions of Americans.

If you are struggling with high credit card balances, you may want to consider Filing For Bankruptcy. It may not be the optimum solution for your current financial situation, but it will provide debt relief. Before making a final decision, you should know it will remain as a part of your credit history for 10 years. If you have an established bank account, you will want to keep it. Many banks will not open accounts for those who have a bankruptcy on their credit record. In addition, many insurance companies will not provide insurance if you have a bankruptcy.

While filing bankruptcy will present some challenges, the relief from your debt may make it worth the challenges you may face. Bankruptcy will prevent you from getting loans or credit for quite some time. However, many banks and credit card companies offer secured credit cards. While these should be used sparingly, the cards can help you rebuild a credit history.

If you have attempted to gain control of your debt through debt management programs and have failed, your next step may be to consider bankruptcy.

If you need help making a decision or have questions, you may want to seek the advice of an experienced bankruptcy attorney. You can take advantage of a free consultation before making a final decision. An attorney will help you decide whether you need to file Chapter 7 or Chapter 13.

 

Filing Bankruptcy Is More Common Than You Might Think

Bankruptcy is so prevalent in the United States; many federal courts are open on Saturdays to keep up with the caseload. High consumer debt, job loss, and medical bills can devastate any financial budget. Filing Bankruptcy is a decision millions of Americans face. In fact, many people do not want to file bankruptcy and continue to struggle financially to avoid filing.

If you are faced with this difficult decision, it is best you review all options before making a final decision. One step you can take to avoid bankruptcy is to join a non-profit credit counseling program. The program will negotiate a lower payment and interest rate with your creditor. You will make one monthly payment to the debt counseling service. Most people can become debt free within five years.

However, if you have already tried credit counseling and still cannot afford to make the lower payment; then bankruptcy may be your only choice for debt relief. Struggling to pay debts you cannot ever pay off is not in your best interest. You deserve a new beginning, and bankruptcy can provide the means to make a fresh start.

Twenty years ago, there was a significant stigma associated with bankruptcy. However, today the stigma is disappearing. Bankruptcy is common, and most people understand there are unforeseen circumstances such as job loss. Bankruptcy is not a perfect solution; however, it will provide financial relief. In addition, you can stop worrying about collection agency calls.

If you continue to struggle with this decision, keep in mind you are only prolonging the inevitable. The relief from burdening debt is indescribable. If you have questions or concerns, you can set up a free consultation with a bankruptcy attorney. He or she may provide you with important information that will help you come to a final decision.

 

There Is No Shame In Declaring Bankruptcy

Millions of Americans are suffering from financial hardships. As job layoffs continue and as unemployment benefits run out, millions of people are facing the difficult decision of Declaring Bankruptcy. Most people do not want to be in the situation of having to file bankruptcy. Unfortunately, for millions of people it is the only option available for debt relief.

The immediate benefit to Declaring Bankruptcy is the endless collection calls will stop. For most people, the collection calls make their financial situation unbearable. The calls are often threatening and do little to resolve the situation.

The average American did not set out to default on their debts. However, unexpected job loss or illness has put many people in dire financial straits. With little relief in sight, for many people bankruptcy will provide a new start in life.  While bankruptcy does have consequences, most people discover it provides them with the opportunity to rebuild their financial life. In addition, most people learn valuable financial lessons that will help them avoid getting into debt in the future.

Once your bankruptcy is discharged, it will remain on your credit record for 10 years. This will make getting credit in the future difficult. However, since millions of people are filing bankruptcy, many credit card companies, and lenders have seen the value in providing credit to people who have filed bankruptcy.

These lenders will offer secured credit cards so you can rebuild your credit history. However, it is recommended you only use these cards if you can pay off the balance each month. You do not want to get yourself in debt again. However, there are many instances when a person may need to use credit.

While Declaring Bankruptcy should not be taken lightly, it should not cause you to feel ashamed. It is merely an unpleasant fact in today’s current economic downturn.

 

What You Need To Know When Filing Chapter 7 Bankruptcy

Chapter 7 Bankruptcy is for individuals who have a high amount of consumer debt such as credit cards and who no longer have the ability to pay. The bankruptcy law is designed to provide debt relief and a new financial start in life. When Filing Chapter 7 Bankruptcy you do have to prove you do not have the income or assets to pay your debts.

The first step is to file a petition with the courts. All bankruptcy filings fall within the jurisdiction of the Federal court. You will have to pay the $299 Chapter 7 filing fee when you file your petition.
The petition will include the following required information:

  • List of liabilities and assets
  • Current income
  • Monthly expenses
  • Unexpired rental property leases
  • Executory contracts

If you have a large amount of consumer debts, you must file documentation of any debt repayment program you participated. In addition, you will need to file a copy of a credit counseling certificate. Credit counseling is required by the courts before filing bankruptcy.

When you file your petition and pay the fee, the court will issue a case number and assign a trustee. If you receive collection calls, provide the caller with your case number. Once your creditors are aware you filed bankruptcy, collection activities must stop immediately. The court will send notification to all the creditors you listed in your petition.

Your trustee may call a meeting of creditors within 40 days after your petition is filed. You are required to be present at this meeting. However, it usually lasts a few minutes. Approximately 90 days after the meeting, you will receive notification of a discharge.

Once you receive your discharge, you are no longer responsible for the debts listed in your bankruptcy filing. However, the bankruptcy will remain on your credit history for up to 10 years.

 

Get Control Of Your Debt By Filing Chapter 13 Bankruptcy

Chapter 13 bankruptcy is for those individuals who have an income but are struggling to pay their debts. It is similar to the bankruptcies corporations use to restructure their debts. As an individual, you have an opportunity to present a repayment plan to the court and to your creditors. Filing Chapter 13 Bankruptcy will not eliminate your debt; however, it will allow you to keep property and assets while you pay off your debts under a new plan.

Filing Chapter 13 Bankruptcy begins with a petition to the courts. In addition to the petition, you must pay a $274 filing fee the day you file. Your petition will include the following information:

  • List of liabilities
  • List of assets
  • Proof of income
  • Monthly expenses
  • Leases for rental property
  • A statement documenting your financial affairs

You must also provide a copy of a proposed repayment plan, and credit counseling verification. Once you file the petition and pay the fee, an automatic stay is issued. During this “stay”, your creditors must stop all collection activities including garnishments.

You will be assigned a trustee who will schedule the 341 meeting with your creditors. You are required to be present at this meeting to discuss your repayment proposal. If your creditors and the trustee approve the plan, you will make one monthly payment to the trustee. The trustee will distribute the funds to your creditors.

If you are unsure whether you should file Chapter 13, you may want to consider hiring a bankruptcy attorney. Chapter 13 can be complicated because of the extensive information that must be supplied to the court. For many people the idea of meeting with creditors causes a great deal of anxiety. Hiring an attorney will certainly relieve the stress related to bankruptcy and the meeting with creditors.

 

Is Filing Bankruptcy Online Possible?

Financial hardships cause people to feel ashamed. Even though there are local debt counseling services, people prefer to use an online service. They do not want to discuss their financial predicament with a person face to face. It is much easier to use the anonymity of an online service. Many people feel the same way about Filing Bankruptcy Online.

Unfortunately, if you want to handle your own bankruptcy filing, the Federal court system does not have a system in place to file online. You can download the necessary documents and instructions, but you will have to complete the forms offline and submit the documents to the local Federal court.

However, you can choose to use an online filing service. By completing a lengthy application, the service will use the information you provide to generate completed bankruptcy forms. Depending on the service you choose, the completed documents may be downloaded to your computer for printing, or the documents will be mailed to your address.

Many of these services will cost at least $250 or more. The services do not provide legal advice and will complete the documents based on information you provide. You will still have to pay the court filing fees in addition to the cost of the service.

Before filing the documents with the courts, you will need to review each documents for accuracy. In addition, if the court requests additional schedules or forms, you will have to complete the forms on your own, or pay the service an additional fee.

While Filing Bankruptcy Online is not possible at this time, you do have the option of hiring a lawyer who will complete the necessary documents. Once you sign the documents, the attorney will file the completed documents with the courts. When you consider the fees of most bankruptcy document services, you may realize hiring an attorney is a better choice.

 

What To Expect When Filing Bankruptcy Yourself

You may want to save money by Filing Bankruptcy Yourself. However, it will take a great deal of time and effort on your part. You can visit uscourts.gov to download the petition, schedules and instructions.

Your first step will be to choose the appropriate bankruptcy for your financial situation. Once you have chosen either Chapter 7 or Chapter 13, you need the appropriate documents and instructions. You will need to make sure you pass the means test to qualify for Chapter 7. In addition, you must meet the requirement of debt counseling. You will also need to research your state’s exemption laws.

The biggest issue people experience with Filing Bankruptcy Yourself is discrepancies in the documents. If the documents are not properly prepared or contain errors or omissions, the documents are rejected. This can cause a delay in your bankruptcy case.

If you file Chapter 7, you will have to appear before the court, and your creditors may be present. You will be asked to state your name and address. The judge will ask you if everything in your petition is true and correct. Your creditors will have the opportunity to ask questions. Although, most creditors send a representative to witness the proceeding. Most creditors will not ask questions or raise objections. If everything is in order, the judge will discharge your debts.

If you file Chapter 13, you will be assigned a Trustee. A 341 meeting will be scheduled with you, your Trustee, and creditors. This meeting is where you will present your repayment plan to your creditors. If the creditors accept your plan, you will then begin paying your debts under the plan.

Many people find it challenging to file bankruptcy on their own. If you have any questions, you have to find the answers yourself, and it may not be the correct answer. Most people discover it is best to hire a bankruptcy attorney.

 

The Cost of Filing Bankruptcy

Filing bankruptcy is an additional financial burden. While bankruptcy does provide much needed relief for those individuals who are experiencing financial setbacks, the Cost of Filing Bankruptcy prevents many people from filing.

The filing fee for Chapter 7 is $299, and the filing fee for Chapter 13 is $274. This does not include attorney’s fees or fees charged by bankruptcy document services. Even if you use a document service provider, you can expect your total cost of filing to be approximately $575. However, this fee does not include legal advice. Some services will have an attorney review your case for an additional fee.

If you hire an attorney to file your Chapter 7 or Chapter 13 bankruptcy, you can expect to pay at least $1,000. Typically, attorneys will charge a higher fee for a Chapter 13 bankruptcy since it is more complex and involves a lot more work over a 3 to 5 year period.  Fortunately, many attorneys allow a portion of the attorneys fees to be paid by the trustee through the Chapter 13 Bankruptcy plan.

If you have enough money to pay for attorney’s fees but do not have enough money to pay the filing fee, you can apply with the courts to get an installment plan for the filing fee.

While the Cost of Filing Bankruptcy can sometimes seem high, the relief from debts is usually worth the cost. Bankruptcy can help you regain control of your financial situation. In addition, you can begin answering your phone again and not have to worry about aggressive debt collectors on the other end of the phone line.

If you need to file bankruptcy, you can begin setting aside money to pay for the fees. Once your bankruptcy is discharged, you can begin rebuilding your life and make efforts to improve your financial situation. If you cannot afford to file, you can look for free or low-cost services in your local community, but most bankruptcy attorneys are used to dealing with clients in a similar situation and often are willing to work with you to find a solutions that will allow you time to get the fees together while the attorney is retained and working for you.