Filing For Bankruptcy: What You Need To Know?

Filing for bankruptcy is a huge decision. It may seem like the best way to settle overwhelming debt and start life fresh all over again. But it’s not as simple as that. Bankruptcy will affect nearly every part of your life and it’s not easy to file for it either. To help you out, we’ve listed a few simple tips that you should know before considering bankruptcy.

Debt consolidation or bankruptcy?
You do not have to file a bankruptcy directly. There are several options that are open to customers. If you are having trouble paying your bills, you can try –
• Talking to your creditors about consolidating your loans and paying them off. If you are serious about paying your loans, most creditors will be happy to work with you to create a modified payment plan.
• Get in touch with a credit counseling service. These companies will work with you and your creditors to create debt repayment plans. You will have to pay the debt counseling company every month and they will pay your creditors every month. A few of these companies are non-profit and you do not have to pay anything for the service.
If these options do not work, you should consider bankruptcy as the next best option.

Credit counseling or debtor education?
If you are planning on filing for bankruptcy, you will have to do both. Individual debtors have to under credit counseling before they can file bankruptcy in a court of law. You will have to acquire a certificate which shows that you have undergone credit counseling and submit it to the court when you are filing for bankruptcy. After this, you will also have to complete a debtor education course within 180 of filing for bankruptcy. Failure to do this may result in your application being rejected.

Hiring a bankruptcy lawyer
Of course, you can file your bankruptcy yourself. There are detailed instructions offered at government websites on the procedure and form. But it’s a far better idea to hire a professional as rules tend to change quickly. You may lose property and rights if you are not aware of how the court procedure works. We recommend you hire a lawyer rather than a firm, as they will be able to deal with you directly. Large firms also advertise their bankruptcy services. In such firms, you will consult only with the paralegal who is dealing with your case. Meet with your lawyer and discuss all your financial problems and assets with him. He will also help you complete the BAPCPA’s means test for bankruptcy. If you cannot afford a paid attorney, you can also apply to the American Bar Association to find an attorney who will take your case pro bono. You can also apply to the local law school or college as they do have free legal clinics with free legal services.

Cost?
The court does have a fee that you have to pay for the filing. This cost varies according to the type of bankruptcy you have filed. The average cost ranges from $185 to about $200. You do not have to pay the fee immediately but you will have to pay it within a few days of filing.