Fees Involved In Filing For Bankruptcy
There are 3 things that cost money when someone is filing bankruptcy. These are:
- Filing Fees $335 in 2019
- Debtor Education Course $15 with Walker & Walkers special discount
- Attorneys Fees this varies depending on the complexity of the case.
Almost all bankruptcy lawyers will offer a free consultation for your case, and as you expect, they will be very candid about how much it will cost you and options you have to pay those fees. There is a set filing fee for the process itself and your lawyer will have a fee. You may think to go it alone, but you are setting yourself up for a huge headache and may even be sabotaging your bankruptcy case.
Filing Bankruptcy With No Money While Being Unemployed Is An Option
As discussed above, filing Chapter 7 while unemployed is an option and is not an unusual occurrence. Bankruptcy exists to help everyday people with debt relief when they need it the most. While it is possible to file bankruptcy with no money, you should be careful about when to file based on your particular circumstances. If you are not certain what timing is best, you can always consult a bankruptcy attorney or partner with a nonprofit like Upsolve for assistance.
Past Due Child Support
A Chapter 7 bankruptcy filing won’t eliminate or reduce child support debt. So filing for Chapter 7 bankruptcy won’t help unless you can free up future income you can use to pay your child support by discharging other debt.
A Chapter 13 bankruptcy case, however, can be a better option. You can stop collection actions by entering into a three- to five-year repayment plan to pay off your past-due support payments in full. Be aware that if you have a hefty outstanding balance, your monthly payment might be steep because you must pay off all of the arrearages in the plan. You’ll still have to continue making your ongoing child support payment, as well.
If you can catch up in Chapter 13 bankruptcy, here are some of the complications you’ll avoid:
- offsets of federal or state income tax refunds
- passport denial
- offsets of state lottery winnings
- driver’s license suspension
- reduction of workers compensation benefits, or
- reduction of social security or disability benefits.
Find out more by reading What Are the Differences Between Chapter 7 and Chapter 13 Bankruptcy?
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Your Trustee May Sell Your Assets
You are able to keep:
- ordinary household goods
- tools up to a set amount used to earn an income and
- vehicle with a value up to a set amount.
Your trustee can sell other assets including your house and property. You must not dispose of any property belonging to the trustee. You must declare any assets you have when you apply for bankruptcy and any you receive during bankruptcy.
Why You Should Never File Bankruptcy
Filing for Bankruptcy Doesnt Help Your Credit at All When you file for bankruptcy, youre giving your credit the death penalty. The bankruptcy and all of the accounts included in the bankruptcy will appear on your credit report for the next 7 years. Even a few years down the road, creditors will see you as high risk.
What Happens To Your Business
If youre self-employed, your business will be closed. Any business assets will be claimed by the trustee.
Your employees may make a claim for unpaid wages and holiday pay, payment in place of notice, and redundancy. Theyll make this claim to the National Insurance Fund, or the money may be claimed in the bankruptcy process.
You can start trading again, but youll have to follow certain rules.
You Might Not Qualify If You’re Newly Unemployed
Passing the means test can be challenging if you’ve recently lost a high-paying jobat least temporarily. Even if you aren’t earning anything currently, you’ll still have to report the amount you received during the prior six months on the means test, and if the figure is high enough, you’ll fail.
The solution? Wait a few months. If you remain unemployed, your six-month average income will drop quickly. Keep in mind, however, that you’ll have to report any unemployment earnings you receive.
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How To Pay Chapter 7 Attorney Fees
Many attorneys will offer you a payment plan on their attorney fee. Take advantage of this! The only caveat is that the entire attorney fee must be paid prior to filing bankruptcy. Otherwise, your attorney would become one of your unsecured creditors, and the attorney fee would be discharged through the bankruptcy filing. No attorney will allow that to happen.
Bankruptcy Exemptions In Newfoundland And Labrador
- Food and fuel required by you and your dependants for 12 months
- Clothing for you and your dependants up to $4,000
- Household furnishings and appliances up to $4,000
- One motor vehicle up to $2,000
- No limit on medical and dental aids for you and your dependants
- Items of sentimental value up to $500
- All pets are exempt from bankruptcy
- Up to $10,000 of equity in your home
- Tools of your trade or business up to $10,000
- Certain income and pension plans
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Gifts Transfers Of Property Or Special Treatment
Any gifts or transfers of property youve made in the year prior to filing for bankruptcy will need to be reviewed by your LITand could be reversed by the court. You will also need to advise your LIT of any payments or preferential treatment to your creditors in the three months prior to declaring bankruptcy .
For more information about bankruptcy exemptions, you can click the button below to book a free initial consultation with a Licensed Insolvency Trustee.
How To Pay For Bankruptcy When You Have No Money
You may be worrying about how you will keep the lights on and food on the table next week, so how to pay for bankruptcy is no exactly something you want to worry about. However, it needs to be done so you can begin to set your finances right again.
The obvious answer is to borrow money or use your tax refund in order to file. These are good options, but you may not always have them. So if you do not, here is what else you can do.
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Payments From Your Income
If you can afford it, the trustee will ask you to make regular payments towards your debts from your income through an income payment agreement . You enter an IPA voluntarily, but theres a written binding agreement between you and the trustee.
If your main or only income is state benefits, the trustee will not normally try to get an IPA.
If you cant agree on payment amounts for an IPA, the trustee can apply for an income payment order . If you dont meet these payments, the trustee can then apply to extend your bankruptcy.
The payments will come from surplus income .This is money you have left after paying your living expenses. Normally you will have to pay all of this surplus income as your IPA payment.
Payments normally last for 3 years . The court wont make an IPO if it leaves you without enough money to meet everyday needs.
The official receiver may use private debt collection agencies to collect the payments.
A fee will be charged in all bankruptcy cases where an IPA or IPO is set up. The fee is set at £150 which will cover the specific costs incurred by the Official Receiver of arranging and setting up your IPA / IPO and will be collected from the first payments you make into the arrangement. This fee is only chargeable on cases where a bankruptcy application was made or a petition presented on or after the 21 July 2016.
Take A Personal Financial Management Instruction Course
Finally, you must complete a post-filing Personal Financial Management Instruction Course within 45 days of your meeting of creditors. Take a look at the U.S. Trustee Program’s site to find an approved course near you. After you’ve completed the course, the last step is to wait to hear from the bankruptcy court whether your debts have been discharged.
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How To File For Bankruptcy
Yeahit’s going to feel like you’re digging up and showing off every bit of private information you’ve ever had. Really, the only upside is they dont ask for that awkward eighth grade yearbook photo.
The Individual Insolvency Register On Annulment
Once notice of the annulment is received your bankruptcy will be removed from the Individual Insolvency Register after:
- 28 days if the bankruptcy order shouldnt have been made
- 3 months if the debts were paid in full or an IVA has been agreed
If an IVA has been agreed, details of this will appear on the register.
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Your Interview With The Official Receiver
If your bankruptcy is approved, youll have an interview with the official receiver. If youve presented your own bankruptcy petition, this may happen directly after the bankruptcy order is made. Alternatively, your letter from the official receiver may invite you to an interview either in person or by telephone. If offered a telephone interview you can ask to be interviewed in person if you prefer.
If you have been made bankrupt by one of your creditors the official receiver may also contact you by telephone to find out if there is anything that needs to be sorted out urgently.
You must attend the interview and cooperate with the official receiver. If you dont, your bankruptcy could be extended beyond the normal 12 months and you could face an examination in court. The more organised you are, the more straightforward the process will be.
Before the interview, telephone the official receiver to confirm or rearrange the appointment let them know if:
- you require special facilities
- there is anything that needs to be sorted out urgently
- you need more time to gather the paperwork for the meeting
If you have been sent a questionnaire, fill it in, noting anything you dont understand .
Collect together all the paperwork you have been asked to take to the interview or have with you during the telephone call.
Face-to-face interviews may take 2 to 3 hours.
After you arrive:
Telephone interviews take at least 30 minutes.
The examiner will:
Ways To Pay For Legal Help When You Dont Have Any Money In The First Place
If youâre not eligible for legal aid and need the help of a bankruptcy lawyer for your case, there are things you can do to pay for the attorneyâs fees. Most bankruptcy attorneys realize that coming up with the fees in a lump sum can be hard and offer payment plans to their clients. So, when they say you have to pay the attorneys fees âup frontâ they often mean âbefore your bankruptcy case is filedâ and not that you have to come up with a lump sum payment somehow.
Use your tax refund to pay the attorneyâs fees: Consumer bankruptcy filings in March and April are much higher than the rest of the year because many people take advantage of their tax refund to pay for legal help.
Stop paying your unsecured debts, like credit card debt, and use that money to make payments to the law firm youâve hired.
Sell something thatâs not protected by an exemption. Any property you own when you file bankruptcy that isnât protected by an exemption can be sold by the bankruptcy trustee to pay your creditors. If you already know that something you own wonât be protected, itâs ok to sell it for itâs fair market value and use the funds to pay your bankruptcy lawyer.
Your best bet is to talk to schedule a free consultation with a bankruptcy lawyer and ask about their recommendations on how to come up with the money to pay them.
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You Will Have A Trustee That Will Manage Your Bankruptcy
A trustee is the person or entity that manages your bankruptcy. They work with you, and your creditors, to achieve a fair and reasonable outcome for all. During bankruptcy, you have an obligation to provide information to your trustee, including changes to your circumstances. This may involve supplying books, bank statements and other documents that the trustee asks you to provide.
When you apply for bankruptcy, you can choose a registered trustee. If you do not choose a trustee, your bankruptcy may initially be administered by either the Official Trustee or a registered trustee.
The Truth About Bankruptcy
If youre reading this, youre probably thinking about bankruptcy. The world may tell you this route is a fresh start . . . or a horrible ending. But whats the truth about bankruptcy?
In simple terms, bankruptcy is a legal process a person can go through to clear some of the debts theyre unable to pay.
If youre so overwhelmed by debt that bankruptcy feels like your only option, know these three things: 1) There is hopeand you will be okay. 2) There are other optionsand you should try every single one before jumping into bankruptcy. 3) Bankruptcy does not define you and will not be the end.
Keep these three things in mind as you read through the rest of this article and learn the truth about bankruptcy, including a breakdown on these specific topics:
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How Chapter 7 Works
A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets. In addition to the petition, the debtor must also file with the court: schedules of assets and liabilities a schedule of current income and expenditures a statement of financial affairs and a schedule of executory contracts and unexpired leases. Fed. R. Bankr. P. 1007. Debtors must also provide the assigned case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case . 11 U.S.C. § 521. Individual debtors with primarily consumer debts have additional document filing requirements. They must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling evidence of payment from employers, if any, received 60 days before filing a statement of monthly net income and any anticipated increase in income or expenses after filing and a record of any interest the debtor has in federal or state qualified education or tuition accounts. Id. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302. Even if filing jointly, a husband and wife are subject to all the document filing requirements of individual debtors.
Obtain Your Credit Reports And Complete Credit Counseling
The next step is to obtain from all three credit bureaus. You’ll need all three reports because creditors don’t typically report to every bureau. If you fail to report a debt, it won’t be discharged in bankruptcy.
Next, you’ll have to complete a . The U.S. Trustee Program has a list of approved credit education agencies on its site.
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How To File Chapter 7 With No Money If Youre Not Eligible For A Filing Fee Waiver
If your household income exceeds 150% of the federal poverty line, you may still easily pass the means test and qualify for debt relief under Chapter 7, but you wonât be eligible for a filing fee waiver from the bankruptcy court.
If youâre subject to a garnishment, it may be impossible to come up with $338 all at one. In that case, you can ask the court for a payment plan to pay the court filing fee. You submit the payment plan application along with your bankruptcy petition and a down payment . The automatic stay will kick in and the wage garnishment will have to stop. That will then give you the chance to pay the rest of the court filing fee so your bankruptcy case can continue.
When You Will Need A Bankruptcy Attorney
However, even Chapter 7 bankruptcy cases arent always plain sailing and straightforward.
Here are the signs that it would be best to get an attorney for your Chapter 7 case:
- You are disqualified from filing a Chapter 7 because you have a significant regular income
- You own a business
- You have a lot of assets that might be at risk
- You have debts that even a bankruptcy cant discharge
- You have creditors that might challenge you
- You have recently transferred assets out of your name
If just one of these signs pertains to your particular situation, then we would strongly recommend that you get yourself an attorney to represent your case. As any of these issues instantly makes for a more complicated case.
You should also enlist an attorney if you intend to file a Chapter 13 bankruptcy.
A Chapter 13 bankruptcy is one where you can catch up on missed mortgage or loan payments, reduce the principal balance or interest rate of a car loan, or get rid of unsecured junior liens, such as second mortgages.
A Chapter 13 bankruptcy is significantly more complicated than a Chapter 7, and not only requires more work, but is particularly challenging to do without all the legal knowledge and the software used by bankruptcy lawyers.
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