How to File for Bankruptcy
Bankruptcy is a series of laws which are enacted to allow
people to pay back their debts. It gives people a chance to start over with a
clean slate. However, with the change of laws in 2005, making the road to a
fresh start is more complicated than it was before. Therefore, to file for bankruptcy,
it is important that you completely understand the benefits and drawbacks and
are familiar with the process.
Know What Type of Bankruptcy to File
The two most common forms of bankruptcy are chapter 7 and
chapter 13. In Chapter 7 bankruptcy, which is also known as liquidation or
straight bankruptcy, your debts are canceled, and your property is secure from
foreclosure as long as you keep making your payments on time.
If you have a nonexempt property, you will have to short
sale it or hand it over to your creditors, to pay them back. In Chapter 13 you
are allowed to set up a repayment plan, usually granting you a time period of
three to five years, for you to pay back the amount you owe. Assets, such as
your car and house, may be kept as long, as you are able to keep making your
payments.
Find Out How Much Filing Bankruptcy Will Cost
The first and most important step is to find out how much
filing for bankruptcy will cost. The fees for filing usually include court
filing fees and lawyer’s fees. Some lawyers will charge a flat fee which is
more preferable and others will charge based on the amount you owe. A lawyer
cannot be your creditor in a chapter 7 case. So, you will have to pay the
attorney in full, before the case is filed.
In a chapter 13 case, the entire attorney’s fee does not
need to be paid before filing, but it must be paid later through your chapter
13 plan. There is also a court filing fees, which has to be paid prior to
filing, unless you apply for a bankruptcy fee waiver, in which you will be
required to pay the fee, within a reasonable time after the filing process. However,
if you are receiving legal services, you will not have to pay a penny for
anything.
Complete the Filing Process
Section 109(h) of the Bankruptcy Code, states that prior to
filing a bankruptcy case, an individual must receive some consumer credit
counseling, within 180 days of the date of filing the bankruptcy case. After
the credit counseling, your lawyer will file a petition for bankruptcy and you
will receive a notification of a court date for a hearing, known as the
“meeting of creditors”.
This meeting ensures that you have given honest and truthful
answers in your petition and you understand all the terms and conditions and
agree to the filing for bankruptcy. After this process, your case will be completed
within four to six months of filing. Therefore, your selected debts will be resolved
for a repayment plan, depending on the type of bankruptcy you have filed for.
As you can see, things can get quite complicated when it
comes to filing for bankruptcy. So, the best option is to contact the Litvin
Law Firm and ask for Gennady Litvin a lawyer who concentrates on bankruptcy
cases. This will ensure you get your due rights and have the best chance of
repaying your debts.
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