Introduction To Bankruptcy

Offered under Federal Law through the U.S. District Court System.

Filing bankruptcy is considered the choice of last resort for debt relief.

The reasons for this are varied, not least of which is the expense to file, the drastic effect on your credit rating, and the legal issues involved.

It was designed to help debtors who were not in a position to pay their debts, for whatever reason, while offering some protection to creditors at the same time. The laws are changing all the time, usually to make it harder to obtain a full discharge of debts.

Some states also have additional laws that supplement the federal laws. It is essential that you get qualified legal help to assist you in understanding the requirements in your district and under your state laws.

Since we are not attorneys, we will not provide legal advice, but will refer you to resources where you can find a reputable attorney to help you.

There are two primary chapters that affect individual filers. Chapter 7 and Chapter 13 are the most common types filed, and involve individual debtors, joint debtors, and some small business filers.

Chapter 7

Chapter 7, or Liquidation, releases the debtor from almost all obligations to pay debt, and may involve liquidation of assets. In most cases, the majority of assets of a debtor are exempt from liquidation. There are a few debts that are not dischargeable when filing. These may include student loans, fraud-related debt, Federal and State taxes, among others.

Chapter 13

Chapter 13, also known as Reorganization, is for the debtor who wishes to reorganize or restructure debt. It permits the debtor and creditors to work out a repayment plan, subject to court approval, for the repayment of debts.

Chapter 13 offers an alternative to complete liquidation, or payment of debts in full. Repayment plans are frequently structured so that only a portion of the original debt is actually paid. This plan could have your debts paid in full in less than 5 years.

Legal & Filing Fees

Legal fees start at about $800, and frequently higher, for individuals only. Fees for couples and businesses start out at $1,000 and up. You will need to spend time getting the paperwork together that your attorney needs to prepare the legal documents to file. You will also spend time with your attorney reviewing bills, answering questions, etc.

The filing fees are around $200 for individuals and couples, this is in addition to any document preparation or legal fees a paralegal or attorney may charge.

Bankruptcy Fact:You can file a Waiver of Fees application with the Court, and, if approved, you would then be exempt from paying the Court filing fees.

With the new laws now in effect, we strongly recommend you find a qualified attorney in your area that knows the bankruptcy laws and exemptions in your state. We highly recommend that you be smart and safe! Use this free online legal referral service ...

Not sure if bankruptcy is right for you? Avoid finance companies offering debt-consolidation plans. These companies may charge high interest rates and tie up much of your property as collateral. Compare your options to consolidate debts, or >get a free debt evaluation now .

Find out if you can reduce your credit card payments by 50%. Get real help that will assist you in finding a way to pay your debts and negotiate with your creditors.

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