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Have you had enough of creditors calling and bills you dont know if you can pay every month? It may be time to investigate bankruptcy and how it can help you get the chaos in your life under control. Contact us today to see what Walker & Walker Law Offices can do to help you get started with and get through the bankruptcy process.
When Should You File For Bankruptcy Without Your Spouse
Filing bankruptcy alone makes sense under these circumstances:
- If you and your spouse have separate debts
- You and your spouse keep your finances separate
- If your spouse has assets they dont want to lose
- If your spouse has a good credit record and has not co-signed for any of your debts
- If your spouse recently filed for bankruptcy and not yet eligible for a discharge
- If you want your spouse to still be able to file for bankruptcy in the future
- Your spouse expects some financial gain, such as an inheritance in the near future.
You Get What You Pay For In A Bankruptcy Case
Filing for bankruptcy is complicated. To add to the confusion, bankruptcy reform legislation passed in 2005 made bankruptcy law significantly more complicated. The requirements for filing and document production are confusing and difficult to meet. A good bankruptcy lawyer knows the rules, the system, and the courts. Shell also be able to communicate effectively with the Bankruptcy Trustee you dont want to have to learn legalese on the fly.
Youve probably seen billboards and cheesy commercials advertising cheap Chapter 7 filings. Is it a good idea to use the cheapest bankruptcy attorney? Probably not. Youre right to be cost-conscious when youre already strapped for cash, but a cut-rate bankruptcy attorney is going to cost you in the long run. Lawyers that offer reduced-fee filing often hand your case down to a paralegal that handles the whole thing with little or no supervision. The low price comes with inexperience and poor attention to detail. Paralegals play an important role in legal work, but you want to have your case in the hands of an attorney.
If your case is dismissed , you wont get the full protection of bankruptcy when you file again later. Serial filers dont get the benefit of the automatic stay, so creditors can and will initiate foreclosure, repossession, and lawsuits leading to wage garnishment and bank levies.
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What Debts Cannot Be Discharged
Take note of these 8 exceptions before you decide to file Chapter 7 bankruptcy:
- Most back taxes and customs.
- Child support and alimony.
- Home mortgage and other property liens.
- Debts from fraud, embezzlement, larceny, or from willful and reckless acts
- Your car loan, if you want to keep your car.
Does It Cost Money To File For Bankruptcy
Filing fee The cost to file for Chapter 7 is $335, and $310 for Chapter 13. Credit counseling fee If you want to file for bankruptcy, youre required to receive credit counseling first. Many agencies charge a nominal fee for this service, which can cost around $50, according to the Federal Trade Commission.
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How To File Bankruptcy In Pa Without A Lawyer
Remember, there are three things in bankruptcy that cost money the attorney fee, the court filing fee, and the fee to take the two required credit counseling courses. But here are ways to file Chapter 7 with little or no money spent on these things:
Avoiding Paying an Attorney fee: It is possible to file Chapter 7 with no money, but you will have to file yourself because an attorney must charge something for representation unless he or she is working pro se as part of some legal aid program.
When people file bankruptcy without an attorney, it is called filing pro se.
Having the court filing fee waived: If you prepare your Chapter 7 bankruptcy filing yourself, you can also file an application for waiver of the court filing fee. If the court approves your application, you do not have to pay the $335 court filing fee. In the alternative, the court may order that you pay the filing fee in installments.
Low-cost credit counseling courses: if you take the time to search, you can find the two online courses you need to take for $20 or $30 for both when you use the same provider.
What Happens When You File For Bankruptcy
If bankruptcy is the option you choose, you will work with the LIT to complete the required forms. The LIT will then file these documents with the OSB and you will be formally declared bankrupt.
From that point on, the LIT will deal directly with your creditors on your behalf. Once you have been declared bankrupt
- you will stop making payments directly to your unsecured creditors
- any garnishments against your salary will stop and
- any lawsuits against you by your creditors will also be stopped
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Common Law Property States
In common law property states, any assets that your spouse acquired separately during the marriage are not considered part of the bankruptcy estate.
This means that their individual assets will be protected.
For jointly owned property, only your share of the property will be used to pay back your creditors.
However, if the property cannot be divided, these jointly owned assets can be sold by the bankruptcy trustee to pay off your debt.
The trustee will then pay your spouse their share of the proceeds, while your share will be used to pay off your debts.
Filing Without An Attorney
Individuals can file bankruptcy without an attorney, which is called filing pro se. However, seeking the advice of a qualified attorney is strongly recommended because bankruptcy has long-term financial and legal outcomes.
Filing personal bankruptcy under Chapter 7 or Chapter 13 takes careful preparation and understanding of legal issues. Misunderstandings of the law or making mistakes in the process can affect your rights. Court employees and bankruptcy judges are prohibited by law from offering legal advice.
The following is a list of ways your lawyer can help you with your case.
- Advise you on whether to file a bankruptcy petition.
- Advise you under which chapter to file.
- Advise you on whether your debts can be discharged.
- Advise you on whether or not you will be able to keep your home, car, or other property after you file.
- Advise you of the tax consequences of filing.
- Advise you on whether you should continue to pay creditors.
- Explain bankruptcy law and procedures to you.
- Help you complete and file forms.
- Assist you with most aspects of your bankruptcy case.
Bankruptcy Forms are available to the public free of charge.
- Use the forms that are numbered in the 100 series to file bankruptcy for individuals or married couples.
- Use the forms that are numbered in the 200 series if you are preparing a bankruptcy on behalf of a nonindividual, such as a corporation, partnership, or limited liability company .
- Sole proprietors must use the forms that are numbered in the 100 series.
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Your Total Bankruptcy Cost
Adding up all of our costs, youre looking at $350-$450 if you file pro se. Of course, its overwhelmingly likely that your case will be dismissed and youll be left on your own to face your creditors. With an attorney, an average Chapter 7 case can cost anywhere from $1,500 to $3,000. An average Chapter 13 case will run you from $3,000 to $4,000.
Consider that the average indebted household carries over $15,000 in alone, not to mention medical debt, personal loans, second mortgages on underwater homes, and other types of unsecured debt. In bankruptcy, youd pay pennies on the dollar toward that debt.
With that in mind, a few thousand dollars seems like a small price to pay.
What Is A Creditors Meeting
The meeting of creditors is often referred to as a 341 meeting because it is required by section 341 of the Bankruptcy Code. You are required to attend this meeting. You will have to show your social security card and a photo ID. Typically, the creditors do not appear at this meeting, although they may if they wish. They would appear in order to show the court that the debt you owe them is not dischargeable. The trustee will ask you questions about your petition, to ensure that you listed all your debts and assets, and that you did not leave anything out.
To find other videos, try searching in YouTube using the terms 341 meeting bankruptcy and chapter 7 or chapter 13.
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Avoid Filing Bankruptcy If You’ll Receive Future Payments
Funds that are not actually in your possession but which you expect to get in the future are part of your bankruptcy estate. If you are filing for Chapter 7 bankruptcy, the Chapter 7 trustee can take this money and use it to repay your unsecured creditors. Examples include agreeing to accept a future bonus at work, getting an inheritance you’ll receive in the future, or filing tax returns that entitle you to a refund. If you anticipate receiving any payments or money in the future, talk to a bankruptcy attorney.
You May Make Surplus Income Payments
When you file for bankruptcy, you must do the following:
- disclose to the LIT information about all of your assets and liabilities
- advise the LIT of any property that was sold or transferred in the past few years
- surrender all your credit cards to the LIT
- attend the first meeting of creditors
- attend two counselling sessions
- advise the LIT in writing of any address changes
- if required, attend an examination at the Office of the Superintendent of Bankruptcy and
- assist the LIT as needed in administering your estate.
You may be required to make additional payments to your LIT for distribution to your creditors.
In addition to paying the LIT’s fees, you may be required to make additional payments to your LIT for distribution to your creditors. These are called surplus income payments.
Each month during the bankruptcy process, you must submit a copy of your pay stubs and proof of other income to the LIT. The LIT then calculates your surplus income.
Surplus income is the part of your earnings that exceeds the amount of income a family needs to maintain a reasonable standard of living. This amount is set by the OSB annually. The larger your family, the more you are allowed to keep the more you earn, the more you are required to contribute.
In other words, if your household income exceeds the level set by the OSB, then you must make additional payments to your LIT during your bankruptcy.
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Wipe Out Credit Card Debt And Most Other Nonpriority Unsecured Debts
Bankruptcy is very good at wiping out unsecured , medical bills, overdue utility payments, personal loans, gym contracts. In fact, it can wipe out most nonpriority unsecured debts other than school loans.
The debt is unsecured if you didn’t promise to give back the purchased property if you didn’t pay the bill. By contrast, if you have a secured credit card, you’ll have to give the purchased item back. Jewelry, electronics, computers, furniture, and large appliances are often secured debts. You can find out by reading the receipt or credit contract.
Avoid Failing To Complete Bankruptcy Education Requirements
If you want to file for bankruptcy and receive a discharge, you must complete credit counseling and debtor education requirements.
- Before you can file for bankruptcy, you are required to receive credit counseling from an approved agency. When you file your case, you will need to submit your certificate of completion to the court. If you don’t obtain credit counseling before filing your bankruptcy, the court will typically dismiss your case.
- Debtor education. After you file your case, you must also complete a personal financial management course . If you don’t satisfy the debtor education requirement, the court will not issue a discharge in your bankruptcy.
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How To Pay For A Bankruptcy
Filing Chapter 13 means you have the financial footing to structure a repayment plan for your debts including attorney fees after youve filed.
But if youre in enough financial distress that you need to file Chapter 7, youll likely need to pay your attorney before he or she files your case. If you cant afford these costs, you can:
Raise the money
Work out a payment plan before filing
Go pro bono, which means finding an attorney who will take your case free of charge
The first option takes creativity and hard work. The others require you to prove financial need, so gather proof of your income and expenses, as well as your tax statements, before meeting with any legal counsel.
Spouses With Separate Households
You do not need to include your spouses income in the bankruptcy filing if you and your partner maintain separate households. Some couples support separate households. Sometimes couples have jobs in different locations. Other times, a separate residence is needed to ease marital tensions. Whatever the reason, if your marriage or partnership includes separate households, you do not need to include your spouses income when filing.
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How Can Legal Aid Help A Veteran Facing Issues With Money Housing Family Health Or Employment
Are you a low-income U.S. Veteran facing problems with:
- Have your veterans benefits been terminated or reduced due to overpayment?
- Have you been denied or terminated from other government benefits?
- Do you have debts that cause problems with meeting your needs, for example obtaining utilities, drivers license, or housing?
- Have you received any letters or notices from the IRS about your federal taxes?
- Have you applied for and been denied a subsidy to help pay for housing?
- Is your rent subsidy being terminated?
- Does your apartment need repairs that your landlord refuses to make?
- Has your landlord given you a notice to leave your apartment or are you being evicted?
- Are you behind on mortgage payments or facing foreclosure?
- Did you receive a shut off notice for your lights, gas, or water?
- Are you afraid for your safety because of your current or former significant other or household member?
- Are you afraid for your childs safety?
- Do you have problems paying child support?
- Does your child have problems in school with learning or with behavior?
- Do you have trouble accessing health care?
- Do you have trouble filling your prescriptions for medication?
- Do you have a criminal record that prevents you from getting a job?
Should You File Chapter 7 Bankruptcy If You Don’t Have Much Debt
Ultimately, it’s up to you. If you’re on the fenceor even if you’re notconsider the following questions:
- Can you negotiate with creditors to pay less? If you can settle with all of your creditors, it could be a good option. However, keep in mind that you’ll be assessed tax on any forgiven amount over $600. By contrast, debt discharged in bankruptcy isn’t taxed.
- Can you pay back the amount you owe? Many people can pay back $10,000 or less. Even so, exceptions exist. Bankruptcy might offer a quicker way to rehabilitate your credit and fix your finances if you don’t think you’ll ever be able to repay your debt. Plus, the automatic stay stops collectors.
- Do you want to work with a credit counseling agency and pay less over time? This approach lets you pay far less in interest and pay off accounts in about five years. However, debt settlement agencies work primarily with major credit card companies, and after you finish paying, you’ll have to rebuild your credit. You’d likely get to the same place faster through bankruptcy, and it could cost significantly less.
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How To File Chapter 7 With No Money
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In a Nutshell
Even though there are bankruptcy fees in the form of court fees, course fees, and attorneys fees, eligible filers can file their Chapter 7 bankruptcy for free.
Written byAttorney Andrea Wimmer.
Filing bankruptcy doesn’t have to be expensive. Some people are able to file bankruptcy for free by asking the bankruptcy court for a filing fee waiver. Consumer bankruptcy, so Chapter 7 and Chapter 13 bankruptcy, aims to provide debt relief to folks struggling with too much debt.
Chapter 13 bankruptcy involves a repayment plan and is reserved for folks with a regular monthly income. As a result, filing bankruptcy under Chapter 13 of the Bankruptcy Code usually means the filer is not eligible for a filing fee waiver. Additionally, the Chapter 13 bankruptcy process is pretty complex, so hiring a bankruptcy lawyer is typically a good investment. Even if it means you have to pay attorneys fees for the legal help.