How to File for Bankruptcy

When you file for bankruptcy it depends on which chapter of bankruptcy you will file to help determine what you keep. There are different advantages to both chapter 7 and chapter 13 for an individual just as there are unfortunately disadvantages to both of them too.

Chapter 7

With a Chapter 7 bankruptcy you will need to qualify. There are certain things that a bankruptcy lawyer can tell you about. That’s why when you think about going and filing any type of bankruptcy you should contact an attorney. A chapter 7 will allow you to have credit card and medical bills discharged; basically it’s a way to get a clean start. But with this type of bankruptcy it will also have you in jeopardy of losing some assets that you have. Like a house or vehicles you can only claim certain things as exempt and thus they will not be able to be liquidated.

Chapter 13

A Chapter 13 has some things that are actually helpful. The best feature of this type of bankruptcy is that you can stop a foreclosure on your home. Yes as soon as the petition is filed in the courts they foreclosure will be halted. This will give you a perfect opportunity to save your home. But with a chapter 13 you will not have your bills discharged you will have to make a payment plan or debt repayment plan. Although the amount that you will pay is around 50% of what was due.

Payment Plan

The repayment plan that you make with a chapter 13 will be done with the help of a credit counselor. It is required by law to meet with a credit counselor and make a debt repayment plan. You will also need to provide the courts with how you will be able to repay the debts you have. So you can see why when you set up this repayment plan that you should consider it all very carefully. If you are not able to make these payments you will be in default.

The Right Attorney

You need to make sure that you find the right attorney to help you out. Get one who you feel at ease with and someone who has a lot of experience. This is very important because the attorney will be the one who will help you keep as much of your stuff as possible. This is a very big deal because the bankruptcy will show on your record for 7 years and that makes it very hard to get approved for any kind of loan.

Filing Fees

For a chapter 7 the filing fees are around $299, while a chapter 13 will run you $279. You should ask the attorney you decide to hire whether these fees are include in their costs. Most attorneys will do this because they are the ones who will be filing the petition for you. Also make sure that you ask if they will accept payment for their fees. When you don’t have money this can be a very important thing to know.

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