Bankruptcy filing may be able to help you when you’re deep in debt. However, since it’s a major decision, which leaves significant impact on your finances, you should be extra cautious when opting for this debt-relief option. Read along to know certain specifics about the process, which should be considered while filing consumer bankruptcy.
Though bankruptcy is a possible way to shed off financial burdens to the maximum extent possible, there is nothing called affordable bankruptcy. In addition to the court fees, you need to pay for the attorney fees too (in case you hire). In Chapter 7, you have to make a payment of $306.00 when you file your bankruptcy petition. While in Chapter 13 bankruptcy, the filing fee is $281.00. Along with that, you’ll also need to bear the costs for the mandatory credit counseling and debtor’s education courses. However, you may qualify for a partial or total waiver of fees or be eligible to pay in installments, if allowed by the court.
Under the federal bankruptcy law, while certain properties are exempt in a bankruptcy case, some others are allowed if taken into consideration by individual state laws. However, even then, each case is determined after analyzing the debtor’s individual circumstances. Exemption of property in bankruptcy is a major and intricate issue and this is why getting help of a bankruptcy attorney is always recommended. Again, before you list your assets and request for exemption, a pre-bankruptcy counseling with an experienced bankruptcy attorney is significant. Take a look at the US State Bankruptcy Laws to see what exemptions are available to you.
Though filing for bankruptcy is a court based procedure and one needs to file with a federal bankruptcy court to get going with it, much of the procedure is administrative and completely managed by a court appointed trustee. The debtor’s presence is only required during the ‘creditor’s meeting’ or ‘341 Meeting’ where the creditors raise questions about the debtor’s debts and assets. In Chapter 7 bankruptcy, it is the duty of the trustee to preserve the value of the estate, to maximize the return for the creditors, to determine if the debtor has any hidden assets or has committed any kind of bankruptcy fraud, and to liquidate any non-exempt assets to pay off the creditors. While in Chapter 13 filing, the trustee is responsible for receiving the debtor’s monthly payments and distributing those among the creditors in appropriate proportion.
There is no law that asks you to hire an attorney for bankruptcy help when you file for bankruptcy. In fact, 10%-15% of people who file bankruptcy represent themselves. However, if you think of representing yourself in the court, you should have a good understanding of the bankruptcy proceedings, as after the enactment of BAPCPA in 2005, the filings have become much more complicated and time taking. Even if you make a minor mistake while filing out the paperwork, it might result in dismissal of your case.
In order to simplify what benefits you may get by hiring an experienced bankruptcy attorney, we have prepared a small comparison below:
|Hire Bankruptcy Attorney||Do It Yourself (DIY)|
|Free initial consultation|
|Protection from creditor harassment|
|Appropriate legal advice (asset protection, valuation of assets, listing exempted property, etc..)|
|Protection from mistakes while preparing bankruptcy forms|
|Absolute peace of mind|
It is only an experienced bankruptcy attorney who properly knows things like how to list your assets, how to value your assets, what exemptions to use to make sure your property is protected, how to calculate your income, what documents to include when you file your petition, and what documents you need to provide the trustee before the meeting with creditors. Therefore, an experienced attorney can always help you make the most out of your bankruptcy.