Are you harassed by creditors? Are your monthly bills more than your income? Many people are in the same situation when they file for bankruptcy. Asking for relief from the court is a position that many individuals find themselves facing. It can be from the loss of a job or an illness that leaves you unable to work. Whatever the reason, here are some things you need to consider before filing for bankruptcy.
There Are Two Chapters Consumers File-7 & 13
If you are having trouble paying your bills, but you have a solid income coming into the home, you may not qualify for a Chapter 7 Bankruptcy. Chapter 7 is a complete liquidation where the court forgives all your debts. You must take a means test and see if you have any disposable income. If you have disposable income, you will have to file a Chapter 13 Bankruptcy plan, which means you have to repay a portion of your debts.
Not All Debts Are Dischargeable
When you file for protection from the courts, you will find that not all of your debts are dischargeable. If you have speeding tickets, tax debts or student loans; you will still have to pay for these items. Some student loans can be dismissed, especially if you have paid on them for a long period of time. Other issues can be any debts that have been obtained fraudulently. Your creditors will have a chance to appear against you in a Meeting of Creditors. If the trustee sides with them in the case, you will have to repay that debt too. Most unsecured debts won’t show at the meeting. However, secured debts are a whole other ballgame.
You Don’t Need A Lawyer To File
When people are facing bankruptcy, it is because their money is really tight. They can file the petition themselves and ask the court for relief. It’s called Pro-Se and it is much more economic than having an attorney. While it will cost you much less, you will also have to face the Meeting of Creditors and the trustee without any representation. You always have the option to hire representation at a later time and date, but if you can do it without help; it saves hundreds of dollars.
Also, if you don’t have money for your filing fees, you can split those up into four payments through the court. They will allow you to divide it up into manageable fees so that there are no further financial hardships.
Bankruptcy is a Big Step
Filing for bankruptcy is a big decision. There are so many variables and the paperwork is quite an undertaking. However, it can mean that all the bad credit is erased and it’s a chance to start a new life debt and worry free.