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How to File Bankruptcy - Understanding Your Options
By
Aaron Prather
Bankruptcy
services aim to stop the sinking ship and
help you avoid being forced to file
bankruptcy by providing the opportunity to
move your collections through a logical and
effective progression of payment requests.
These services are not generally covered by
legal aid, nor are the cost covered by any
government agency.
Bankruptcy is a legal process which can
relieve you of most, if not all, of your
debts. For the majority of people bankruptcy
is something they think won't affect them,
but in this day of ever increasing consumer
spending, easy availability of credit cards,
and increases in interest rates, the concept
of personal bankruptcy is beginning to loom
large on the horizon. Bankruptcy law is very
complicated in nature, and you should always
consult with an attorney before you take any
action. The laws differ from state to state,
with mounds of legal paperwork to complete,
so be sure that the lawyer you select is an
expert in this field.
Individuals will normally choose between
filing a Chapter 7 and a Chapter 13
bankruptcy. Chapter 7 is the type of
bankruptcy used when you do not have the
ability to pay off your existing debts.
Under the new law, bankruptcy applicants who
wish to file under Chapter 7 must meet
certain eligibility requirements under a
"means test". Under this test, if your
current monthly income is less than the
median income in your state, you can file
for bankruptcy under Chapter 7.
Under the new laws, individuals wishing to
file bankruptcy under Chapter 7 or Chapter
13 must show their proof of income by
providing federal tax returns from the last
tax year. If an applicant is ineligible for
filing under Chapter 7, he or she must file
under Chapter 13 instead. There are
differences between Chapter 7 and Chapter
13, but the main distinction is that under
Chapter 13, the debtor enters into a five
year repayment plan in which he or she must
pay a certain amount of money to creditors,
based on an expense to income formula.
A bankruptcy judgment is recorded in your
credit history and remains there for seven
to ten years, depending on the type you
obtain. People in bankruptcy can still
obtain credit as a number of banks now offer
"secured" credit cards, where a debtor puts
up a certain amount of money in an account
at the bank to guarantee payment. Usually
the credit limit is equal to the security
deposit given, and is increased as the
debtor proves his or her ability to pay the
debt.
Online services are also available to help
you guide through the intricacies of the
process. These services help you determine
what form you should pursue and are usually
provided on a low flat fee basis. The number
of these services is increasing to satisfy
rising demand, so if you are even
considering bankruptcy as a way to free
yourself from an overburdening debt, then
it's probably a good idea to see what types
of services are available and what they can
offer you. Using bankruptcy services, with
the help of knowledgeable and experienced
debt relief counselors, can make things a
lot more manageable for the distressed
person.
Conclusion
Are you one
of the many that suffer from insurmountable
debt and wonder if bankruptcy is an option?
Give us a call at (203) 924-6700 or
contact us.
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At these seminars an attorney will personally go over your
mortgage looking for a defense