Losing a lawsuit and winding up with a judgment against you is a nerve wracking experience for an individual. Your blood pressure shoots up when you frantically look for a way to pay off your judgment. What happens in the case when you can’t pay them! The very thought might take a toll on your peace of mind. This article can help you to solve your problems with few simple suggestions.

Bankruptcy can be an easy solution to discharge your judgment, but if you have an alternative to pay off your debts like a debt management program then seize the opportunity. It might blemish your credit report. But you can always repair your credit report once your bankruptcy proceeding gets over. Critically analyze your situation and make the decision if you want to file bankruptcy.

If you are sued by your creditors then filing bankruptcy can help you to discharge your debts.  An “automatic stay” is put into place after filing bankruptcy. This prevents your creditors from engaging in further collection practices. And once you have completed the bankruptcy process you are protected you from your obligation to creditors.

If you have decided to file for bankruptcy but are not aware of the fling process then the following steps can help you to understand the entire procedure:

• Your first and most important task will be to make a list of your valuable assets, your income and your debts. The list should include all of your personal items, all of your credit card debt together with all other debts and medical expenses.

• In order to qualify for bankruptcy procedure you need to undertake a Means Test. A comparative analysis will be drawn between your income and median income of your state of residence. If your income exceeds the median income of your state then you will probably fail to qualify for chapter 7 bankruptcy. In that event you can file for chapter 13. Visit the website of US Bankruptcy Court’s Means Test if you intend to take the test.

• You can decide if you want to hire a bankruptcy attorney once you have decided the chapter you are filing under. You might choose to file without a bankruptcy lawyer but a bankruptcy attorney’s advice can lead you through the process with ease. An attorney will be required if you plan to file under chapter 13 bankruptcy. You also need to go through a credit counseling session that will be presented before the court while filing the petition. A bankruptcy lawyer can give you right advice and show you the proper process when you are filing bankruptcy.

• Try to fill in and submit the bankruptcy form. Read the form carefully so that you can complete the required criteria mentioned in the form and attach all the necessary documents to it. Before you file the bankruptcy petition you need to go through a credit counseling session and the related paper works need to be submitted in the court.

• After the filing of the bankruptcy petition you will attend the court hearing that includes a 341 Creditor’s Meeting held within 20-40 days after filing bankruptcy. If you follow through with the court proceedings then in the final hearing you will receive your discharge from debt. Here an experienced bankruptcy lawyer can handle the routine court proceedings on your behalf; thus converting the whole process into a simplified form for you.

Here are few common types of lawsuits that are discharged in bankruptcy:

• Credit card debt collection lawsuit

• Mortgages and vehicles lawsuit

• Unpaid medical and other bills lawsuit

• Business and individual debts and personal injury lawsuit

These are four basic lawsuits that can not be discharged by filing bankruptcy.

Filing bankruptcy will not discharge the lawsuit in case of a child support, alimony or a compensation for an injured person whom you have hit while driving drunk. Other than the above exceptions, bankruptcy would be a viable option for you if you are submerged in a sea of debt after losing a lawsuit.

What Is bankruptcy? What does it mean to declare bankruptcy?

Bankruptcy is a legal process available to consumers or businesses seeking federal protection from creditors when the borrower is unable to repay their debts.  Declaring  bankruptcy is the legal filing with a court of a person’s or company’s inability to repay debts. It is intended to afford the debtor with a legal fresh start by “wiping the slate clean” of debts.

The ability to file for bankruptcy and obtain a fresh start is an important and long-standing part of American law. The right to file for bankruptcy protection is guaranteed under federal law and the U.S. Constitution  (Article I, Section 8, of the United States Constitution).  Prior to 2005 it was a relatively simple process which enabled many people to easily walk away from their debts.

Why were changes made to the bankruptcy law?

In 2005, mostly at the prodding of the credit card industry, Congress made some significant changes to bankruptcy laws . The main purpose of these changes was to make it harder to file for bankruptcy. Nonetheless, the ability to file for bankruptcy and obtain a fresh start is an important and long-standing part of American law and people who need bankruptcy relief can still get it.

The bankruptcy laws have made it more difficult to file Chapter 7 as the government would prefer that everyone meet their financial obligations. The eligibility requirements for Chapter 7 or Chapter 13 are based on your income, living expenses, and debts. A bankruptcy lawyer will help you determine which option is best for you.

What are some of the more important changes to bankruptcy laws?

* Higher income filers must file for Chapter 13
* Filings are more closely investigated and more documentation is required
* Credit counseling and  financial budget counseling is required
* Property must be valued at replacement cost, instead of a “fire sale” cost
* State exemptions are not available to new state residents in order to prevent debtors from moving to a state with more liberal exemptions.
* Residency requirements have been tightened to prevent people from moving to states that allow a person to protect more equity in their personal residences.

What are the types of bankruptcy available to individuals?

There are two basic types of bankruptcies for individuals: Chapter 7 Bankruptcy and Chapter 13  Bankruptcy.

Chapter 7, also known as a liquidation bankruptcy or no asset bankruptcy, is a bankruptcy procedure designed to eliminate your debt. One of the advantages of Chapter 7 is that it immediately stops creditors from collecting or attempting to collect any of your debts the moment you file the bankruptcy petition with the court. This is done by filing a Suggestion of Bankruptcy document with creditors. The other advantage is that at the conclusion of the process you are immediately provided with a discharge of debt without having to pay any of your debt and you have no monthly payment plans. Both individuals and businesses can file for Chapter 7 bankruptcy.

Most individual bankruptcies are Chapter 7. It is relatively fast and simple. Typically, a case is opened and closed within three to six months. Local bankruptcy lawyers in your area are available for Chapter 7 bankruptcies filings and consultations.

There are numerous reasons why people elect a Chapter 7 bankruptcy over a Chapter 13 bankruptcy. Most people who chose Chapter 7 do so because they have large debts that they cannot manage to pay down, such as credit card bills, hospital bills or legal judgments.

A Chapter 13 bankruptcy, also known as a wage earners bankruptcy, is different from Chapter 7 in that it does not completely eliminate your debt. Instead, it gives you the opportunity to pay off some your debts over an extended period of time through a court-approved, court-supervised, and court-enforced payment plan.  Chapter 13 bankruptcy filers are given from three to five years to pay off their debts. You make one monthly payment based on how much you can afford for 3 to five years. Most creditors will not be paid in full, however, and unpaid balances are discharged, subject to some exceptions, at the end of the three to five year period.

Who can file for bankruptcy?

Generally, almost anyone can file for bankruptcy. If you are a person who simply cannot afford to pay your bills, regardless of the reason, you probably can qualify for bankruptcy, either Chapter 7 or Chapter 13. If you have filed a previous bankruptcy, it could limit the options that may be available to you. For instance, if you have previously filed for a Chapter 7 bankruptcy, you cannot file another Chapter 7 for eight years.

You will not, however, be permitted to file for bankruptcy to in order to beat your creditors. If you know you are having financial difficulties, you cannot deliberately max out your credit cards just to beat the system by filing bankruptcy. At the very least you could find your bankruptcy filing dismissed and wind up being stuck with all that debt. You could also find yourself filing your next bankruptcy petition from a prison cell.

There are numerous documentation requirements. You will need to provide an inventory of everything you own. You will need to provide your personal tax returns, proof of income for six months prior to filing along with a list of your spending, and a certificate showing that you took a mandatory credit counseling class.

What is the actual bankruptcy process?

There are eight basic steps in obtaining your bankruptcy. Your bankruptcy attorney will guide you through the entire process which takes about 3 to 6 months on average.

* Attending a credit counseling course at an approved credit counseling agency.
* Meetings with your bankruptcy attorney to draft copies of your paperwork.
* Providing proof of income for the previous six months in order to determine eligibility.
* Determining with your attorney which assets are safe in a bankruptcy.
* Filing the paperwork with the bankruptcy court.
* Attending a short meeting with the bankruptcy trustee.
* Attending an additional personal financial management class.
* Obtaining the final discharge of debts from the bankruptcy court.

Credit counseling

Before you can file for bankruptcy, you must first have a consultation with a nonprofit credit counseling agency that has been approved by the United States Trustee. The purpose of this consultation is to see whether there are any alternatives available to you other than filing for bankruptcy protection.

You must meet with the counseling agency within the 180 day period prior to filing your bankruptcy petition. The agency will probably try to work out a repayment plan with you and your creditors. You do not, however, have to agree to any repayment plan. You will still receive a certificate from the agency stating you have received the counseling. And you need to submit their proposed repayment plan to the court along with the rest of your filing.

After your bankruptcy has been completed, but before your debts are discharged, you will also be required to attend a personal financial management class. A certificate will be given to you after completing your course.  This certificate must be submitted to the court. This is the last step of your bankruptcy.

Can I keep my house and my car?

Bankruptcy courts are aware of the importance of keeping your home and car. There are certain rules that may allow a person to keep their home or car under what is called a “Homestead Exemption” or “Automobile Exemption.”

Homestead exemptions vary by state and marital status. The concept is very simple: if your home has more equity in it than the amount of your state’s homestead exemption you will be forced to sell your home to pay off your other debts. If your homestead exemption is higher than the amount of equity in your home, you may be able to keep your home even after you file for bankruptcy.

For example, if you have $25,000 in equity in your home, and your state’s homestead exemption is $50,000, you may be able to keep your home. If your equity is $150,000, the court will force the sale of your home in a chapter 7 bankruptcy proceeding. However, you could file Chapter 13 bankruptcy and still keep your home.

Automobile exemptions work very similar to homestead exemptions. However, if you are behind on car payments in a Chapter 7, your car may still be repossessed by the creditor in the bankruptcy proceeding if you do not pay your back payments. However, Chapter 13 could provide you an opportunity to prevent the repossession of your car even if you are behind on the payments.

Personal property exemptions and other assets

When you file for bankruptcy, the court will allow you to keep certain personal items of low value. Every state has different laws regarding what you can keep. But in general, you can keep a small amount of jewelry (ranging from $2000 to $7000), health aids, animals, crops, appliances, furnishings, books, musical instruments, and various other inexpensive items of property.

Personal luxury items such as expensive watches, furs, paintings and jewelry must be disclosed and will probably be sold by the trustee.

Pensions are generally exempt from bankruptcy and so are ROTH IRAs and Keoghs. Insurance benefits are also usually exempt, as are tools of your trade.

Do I have to pay my credit card bills if I’m bankrupt?

Credit card debts can be completely forgiven in bankruptcy as long as you did not run up your credit cards just prior to filing for bankruptcy protection.

After you file for bankruptcy, it is against the law for credit card companies to contact you. They must stop calling you, cannot file a lawsuit against you or proceed with a lawsuit they previously filed; they cannot record liens against your property; they cannot report your payments to the credit reporting agencies; and they cannot seize your income, bank accounts, or property.

When you file for bankruptcy, something called an “automatic stay” goes into effect. The automatic stay usually prevents most actions from moving forward against you. No more harassing phone calls or letters, and no more threats from lawyers.  The “automatic stay” will also temporarily stop a foreclosure, but only for the very short term until the bank goes into court and gets the stay lifted.

Will my other debts be eliminated in bankruptcy?

You may have all types of debts that are weighing heavily on you. Most of these debts are dischargeable in bankruptcy, but there are a few exceptions.

The most common dischargeable debts are credit cards, medical bills, obligations under leases and contracts, personal loans and promissory notes.

The most common debts that are not dischargeable are student loans, alimony and child support payments, certain tax debts, and criminal fines and penalties (like parking tickets or moving violations) imposed on you by the courts.

The most common debts that are sometimes dischargeable are student loans, some IRS income taxes, and debts from prior lawsuits. The term “sometimes” is used because it depends on the circumstances of the debt. For instance, while generally non-dischargeable, if your student loans are causing a tremendous burden and you have made a good faith effort to pay them back, they may be discharged. In regards to regular income taxes, if the taxes have been owed for more than three years, and the IRS has not reassessed the amount in the last 240 days, they may be discharged.

Since each individual’s situation is unique, you should discuss with your bankruptcy attorney all of your debts to determine whether or not they can be discharged in bankruptcy.

I am married. Do married couples have to file bankruptcy together?

Many married couples often feel they are legally responsible for each other’s debts. This is simply not so.

While you are responsible for your own debts, these debts may or may not include your spouse’s debts. It depends on whether you have co-signed any debts together. For instance, if you bought a car together, you may both have signed for the loan. Also, if you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin), you and your spouse are jointly responsible for each others’ debts incurred during marriage, even if you did not “co-sign” for the loan.

In order to file a joint bankruptcy petition, you must be legally married. Living as co-habitants does not allow you to file joint bankruptcy. Most states do not recognize common law marriages or same-sex committed relationships as valid marriages.

It costs about the same to file a joint bankruptcy as is does to file individually

What are the alternatives to bankruptcy?

Bankruptcy may not always be the best solution for many reasons. You might still have to give up your non-exempt assets. Your debts may be non-exempt and non-dischargeable, or you may not be eligible to file.

You might want to take other steps first. You could try to sell whatever assets you have to pay off your debts. If you own anything valuable, such as jewelry, cars, or watches, you may want to consider selling them first to try to pay off your debts. Another option may be to approach family and see if they are willing to help you. Of course, many people prefer not to involve family, especially if they can qualify for bankruptcy.

Transferring credit card debt to a lower interest credit card will only solve your problems temporarily. Oftentimes, the new credit card companies will fight to collect their money if you file for bankruptcy after transferring large debts to a new card.

Refinancing your home if you have equity is an unattractive alternative, as is a home-equity line of credit. You want to make absolutely certain you can afford the payments because if you can’t, you risk losing your house because you have turned your unsecured and dischargeable credit card debt into a lien on your property. You must be very cautious about trying to pull equity out of a house to pay creditors, especially if bankruptcy could provide a way to preserve your equity and still eliminate your debt.

Do debt consolidation services work?

If you can find a debt consolidation service that isn’t an outright scam you will find a plan that is similar to a Chapter 13 payoff plan. They get the credit card companies to  lower their interest rates and your payments. You make one payment a month to them for years and after they’ve taken their cut they give the rest to your creditors. After you have completed the plan the credit card companies wipe out your remaining balance and consider you paid up. They report it to the credit reporting agencies as a “negotiated settlement” which puts another dent in your credit score and then promptly send a 1099 to the IRS reporting the “forgiven amount”.  The IRS comes looking to you for taxes on the “forgiven amount”.  With few exceptions, whenever you settle a debt with a creditor for less than you owe, you are liable for taxes on the balance you didn’t pay. Simply stated, if you owe the bank $10, 000 and they agree to take $6,000 as a settlement, you now owe taxes on the $4,000 you didn’t have to pay. Depending on your tax rate, you could owe Uncle Sam $1,000 in taxes. And he will want it all right now. If you think the credit card companies were annoying when they didn’t get paid, just wait until the IRS comes after you!

What are the long term consequences of filing for bankruptcy?

Without a doubt bankruptcy will have the worst possible effect on your credit score.  Credit reporting agencies will report information about your bankruptcy for as long as 10 years. If you’re thinking about filing bankruptcy this may be of little consequence since your credit score may already be so low that it would take that long to rebuild your credit anyway. Having a bad credit score doesn’t necessarily mean you can’t get any credit, it just means that you will have to pay a lot for it for years to come.

The credit cards and other accounts that you listed as part of your bankruptcy will definitely be canceled by the issuers if they have not already suffered that fate.  Oddly enough, you might be surprised to find that you can still get new credit cards and other loans, and you will probably start receiving offers in the mail for them soon after you file for bankruptcy.  The offers you will get will be for accounts where the credit line will be small and the interest rates will be much higher than on regular credit accounts. Since after bankruptcy you have no debt and can’t file again for 7 years you’re a actually a better credit risk to the card issuers than before your bankruptcy.

If you had any loans before bankruptcy that had co-signers, your obligation to repay will be wiped out. Instead, your co-signer will get stuck with them.  So if your parents co-signed a car loan for you they will continue to be fully responsible for the loan.

Tapping into your retirement plan is oftentimes ill-advised. The reason is because pension plans are generally safe from bankruptcy. You will be able to keep your pension or retirement money, unless you borrow against it. If you borrow against it, your creditors can attack your pension or retirement money during bankruptcy and you will have to pay income tax penalties on an early distribution.

Conclusion

Deciding to file for bankruptcy is not an easy decision. While you can file bankruptcy without a lawyer, doing so should not be undertaken lightly. There are simply to many pitfalls that need to be avoided. Even if you don’t want to hire a bankruptcy lawyer, at least talk to one before you file. Most will give you a free consultation and many will keep the cost down by letting you do some of the grunt work yourself if you decide to file for bankruptcy.

There are a number of ways of filing for bankruptcy in the US, and they are referred to as “chapters”. With 85% of debtors filing under chapter 7, this is the most popular form of bankruptcy in the US, probably as it removes all debt (there are some exceptions like tax, alimony and student loans to name 3), unlike the second most common form of bankruptcy, chapter 13, where debt is repaid by means of a legally enforced repayment plan.

The biggest attraction of chapter 7 bankruptcy is that despite the fact that all ones assets are sold and the proceeds distributed amongst creditors, an individual is then debt free. And therein lies the problem.

Unfortunately for the creditors, a chapter 7 bankruptcy will often leave them financially out of pocket by a large amount.

Now this may be unavoidable, however, it may be that an individual can, in fact, afford to repay their debts if they are rescheduled under a chapter 13 filing, which is essentially a repayment plan over a 3-5 year period.

To get over this problem, the 2005 Bankruptcy Abuse prevention and Consumer Protection Act bought in a means test. This is only applicable to individuals and consumer debt.

The means test was introduced to ensure that only those who genuinely cannot repay their debts can claim chapter 7 bankruptcy.

The means test works by taking the applicants average earnings over the past 6 months before filing, and deducting certain monthly expenses to arrive at the net “disposable income”.

There are then two more steps. The first takes your previously calculated “disposable income” figure and compares this against the median income for a family of the same size in your state. If your income is less than this, you do not need to take part 2 of the test as you automatically qualify for chapter 7.

This means that the applicant who fails the means test is forced into a chapter 13 repayment plan over 3-5 years.

The point is that you should really get professional legal advice before filing bankruptcy, so you can be properly prepared.

Bankruptcy is a drastic step, despite what other people might tell you. It can ruin your financial postion as your credit score drops. Although chapter 7 is the most common form of bankruptcy, it might be worth looking at chapter 13 bankruptcy law. If you would like further free information and advice, visit www.chapter13bankruptcylaw.net.

Those who are thinking about filing for bankruptcy in the state of Michigan might be wondering what they can expect out of the process. While bankruptcy is not a cure-all for financial problems, it is sometimes the best option. Here is some handy information about how one qualifies for and goes about filing for bankruptcy.

Firstly, it’s important to recognize that not all debts will be wiped out through this process. In Michigan, some debts will remain afterward, including taxes, criminal and traffic fines, back child support, most student loans and anything not specifically on the list of debts to be discharged.

Also, credit counseling is mandated by state law before filing for bankruptcy. Debtors must either contact creditors to obtain a workable payment plan or seek a debt consolidation loan within six months prior to filing. After the documents are filed, completing a financial management course is also required.

It’s important to understand the differences between the two bankruptcy types. Chapter 7, the discharging of debt while keeping a home or property not in default, and Chapter 13, a repayment plan that usually allows the debtor to keep a home, automobile and certain other property even though the loans for such properties are in default.

Michigan bankruptcy filings require extensive and often complex paperwork, including a two page petition and a list of all the debts to be discharged and property to be excluded. Deeds or titles of property owned and verification of income, expenses and financial transactions for two years prior to filing are also needed. The fee for Chapter 7 filings is $299, while Chapter 13 is $274.

Fortunately, once the paperwork is filed, the harassing phone calls from creditors can be stopped. In fact, creditors are required by law to cease contact once advised of the bankruptcy, but the court may not inform them for several weeks. To speed along this process and cease the calls, debtors should let creditors know of the filing right away and supply a case number.

The proceeding itself consists of a short meeting (called a 341 meeting) with a bankruptcy trustee. This individual may ask some questions in regards to financial status to clarify matters. The debtor is sworn under oath to answer. The debtors’ attorney and creditors can also attend this meeting.

Those considering this option will be relieved to know that bankruptcies don’t end up in court unless a debt or its discharge is disputed. Creditors have 60 days after the 341 meeting to challenge any debts included. Should there be no dispute, the process is generally finalized in three to six months.

Since there are so many steps involved in filing a Michigan bankruptcy, it is recommended that those considering this debt relief option contact a local attorney that specializes in bankruptcies for further assistance. The right attorney can be an invaluable asset, protecting your property and your interests to the full extent of the law during an emotional and difficult time.

If you’re thinking about filing for bankruptcy in the Detroit area, contact Michigan bankruptcy attorney A Better Way Bankruptcy. With nearly three decades of collective experience, their friendly, helpful and compassionate attorneys and professionals can help you obtain relief from debts, stop calls from creditors and get the fresh start you need.

People face problems with debt for many reasons. Whatever those problems are, there are almost always solutions to debt and very effective bankruptcy alternatives.

Declaring bankruptcy is rarely a sensible idea and looking at the alternatives and giving them a try, is often the most effective approach.

Bankruptcy alternatives are split into two sections which are, Debt Consolidation and Debt negotiation or relief. Each can get individuals out of their debts, however, debt consolidation will need an individual to supply some kind of security, because it is a additional loan to cover an people existing debts.

Many individuals who are needing help can not give this sort of security, and consolidation additionally has the downside of often taking an extremely long period of time to repay the debts, due to the fact that with the consolidation fees, a persons debt can actually increase.

Debt negotiation is completely different. In debt negotiation, a specialist debt negotiation firm works for a private and goes to their creditors and then negotiates reductions with them, to reduce the individuals current debt level.

It is successful because these specialist companies understand the marketplace and credit companies. They are able to make create them see that if an individual is forced to declare bankruptcy, they can finish up obtaining nothing.

If they negotiate, an individual won’t need to declare themselves bankrupt and they will get more of what they are owed.

It’s really extremely simple and people will reduce their debts by a significant amount sometimes as much as 80%. It also has the advantage of permitting folks to pay off debts extremely quickly as a result of the reductions.

If folks do opt for this method they must remember that the negotiating procedures will take a while, and whilst it’s occurring, their credit score can be affected. But a good debt relief firm can clarify this to their clients and can additionally deal with all the phonecalls and contact with the creditors, law organizations or collection agencies. Once the negotiation is finished and the individual starts to make repayments, the credit score will begin to recover.

This is why it is extremely necessary to only select the best debt relief companies to work with. The most effective ones will not just deal with all the contact with creditors, but they will additionally be able to use all their skills and expertise, to negotiate the biggest reductions on the debt that’s owed.

Unfortunately, because of the nature of the debt industry there are some debt relief firms operating that don’t have the correct skills and expertise and are looking to take advantage of desperate people.

This review will explain exactly what you need to know to find the best debt relief companies to help you. It can be found at Avoid Bankruptcy to read the review page now.

Perhaps you have lost your job or have mounting medical bills, but you just can’t keep ahead of your creditors. You wonder whether filing for bankruptcy can be a viable solution and allow you to get your life back on track. You don’t know how to file for bankruptcy. You are not alone. Analysts predict that bankruptcy filings will hit 1.5 million in 2009, an increase from 1.1 million in 2008. This is below the 2005 total of two million filings, due to the fact that the 2005 U.S. Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) significantly toughened the U.S. Bankruptcy Code when it became law.

But you may have heard that to file for bankruptcy would cost you a significant amount of money in lawyers’ and court fees. Is this true? Is it possible to file for bankruptcy for free? Where do you start to learn how to file for bankruptcy?

If you are considering bankruptcy, the first thing you need to do is learn about the different types of bankruptcy that are available for private citizens. For a basic introduction, log onto www.uscourts.gov/bankruptcycourts/. This U.S. government website provides objective information free of charge about personal bankruptcy.

Chapter 7 (Liquidation) For individuals who have very few assets (these cases are often called “no-asset cases”). A court-supervised trustee assumes control over the debtor’s assets, liquidates them to cash, and makes distributions to creditors. The debtor is released from many or all of their debt obligations, but typically does not get to keep many assets aside from a short list that may include a primary residence and one vehicle.

Chapter 13 (Adjustment of Debts) For individuals who have debts but who also have a source of income and are able to make regular payments to their creditors. Under Chapter 13, as long as the debtor sticks to a three- to five-year payment plan, the debtor is often able to keep assets such as a primary residence, even when facing foreclosure.

There are other forms of bankruptcy, primarily for businesses, as well as Chapter 12 (Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income), which is designed for family farmers and fishermen with regular income. The Servicemembers’ Civil Relief Act provides certain protections for members of the military.

Can I File For Bankruptcy For Free? If you are considering filing for bankruptcy protection, you should consult a bankruptcy lawyer. Depending upon the state in which you file, legal fees will average $1,700. But if you are truly determined to do it yourself, you need to educate yourself about the requirements for Chapter 7 or Chapter 13 bankruptcy, including how to qualify, how to file, and what may happen to you and your assets if the court grants you a discharge. For bankruptcy information, log onto the U.S. Federal Trade Commission website at www.ftc.gov. In the search box at the upper right type “bankruptcy”. You will be directed to many informative articles and resources. Topics covered include a review of alternatives to bankruptcy, an analysis of your personal financial situation, and the creation of a personal budget plan.

You will also find information on the U.S. Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which brought many changes to personal bankruptcy and made the process more complex and with more requirements. For example, BAPCPA mandates that individuals who seek bankruptcy protection must first get credit counseling from a government-approved organization. They need to do this within 180 days before they file. They are also required to complete a debtor education course.

The actual bankruptcy court fees that you are required to pay are not high; according to www.uscourts.gov, the total fees collected at time of filing Chapter 7 are $299, and for Chapter 13 the total fees are $274. If you hire a bankruptcy attorney you are required to pay the attorney’s fee in advance because attorney’s fees are not recognized by the bankruptcy court and cannot be a part of a bankruptcy discharge. Attorney’s fees are in addition to filing fees. Largely because of BAPCPA, it is very challenging for an individual to file for bankruptcy without the professional guidance of a bankruptcy attorney.

About the Author

ConsumerFinanceReport.com features articles, guidance, and commentary on a variety of personal finance topics, including debt relief.

When you are about to lose your home, you don’t care about anything else. It consumes your every thought. The only way you will be able to relax is to get the foreclosure called off so you can go back to enjoying your home and your life. Well, as a last ditch effort there is a method available to stop foreclosure on your home.

Filing for bankruptcy is bad for your credit, but sometimes it can save a home from foreclosure. Under chapter thirteen of the US bankruptcy code, debtors are allowed to submit a plan for repaying their debts. The foreclosure process is halted as soon as you file for chapter thirteen. However, your repayment plan is subject to review by creditors and must be approved by the bankruptcy court.

You can’t file for bankruptcy until after you have completed credit counseling. This requirement serves the purpose of making sure that bankruptcy is really the only way you will be able to pay off your debts. The credit counseling company will work with you try to come up with a way for you to repay your debts without bankruptcy. Their proposed plan must be submitted when you file.

Your repayment plan must be submitted to the court within fourteen days from the date you file your bankruptcy papers. Most likely, your lawyer will submit your paperwork for you and will do it all at the same time. Sometimes the plan will be filed later so that you can have an earlier filing date so you can get the foreclosure process stopped and give yourself a little more time to prepare the plan.

After filing, a creditor’s meeting will be set up. You must appear at this meeting to answer your creditors’ questions about your repayment plan. Some of your creditors may question the amount you are proposing to pay. They want to make sure that you will not have any money left over after paying your debts and necessary living expenses.

After the creditor’s meeting has been completed, your repayment plan will be reviewed by the court to make sure that it meets the requirements set forth in the bankruptcy code. It can take up to 45 days for approval, but you have to start making payments according to the terms of the agreement within 30 days.

The biggest drawback to using chapter thirteen bankruptcy to stop foreclosure is that if you are unable to pay the payments as agreed, you could still end up going through foreclosure. The judge can dismiss your case or make you go through chapter seven, where your assets are sold to cover your debts, if you don’t pay everything as agreed. For this reason, you should consider all of the potential risks and benefits before deciding to go ahead with filing for bankruptcy.

For assistance with loan modification contact a qualified loan modification attorney that will look out for you and your family’s best interest such as Janian and Associates.