For most people, there are two types of
bankruptcy:
1) Chapter 7, also known as a straight
bankruptcy. This is designed to give a fresh start to a
person who is hopelessly buried under debt. The
debtor turns over all non-exempt assets to the bankruptcy
trustee. The assets are then sold, and the creditors are
paid. Within four months, all debts are discharged,
and the debtor is free to start over. This is the fastest
and easiest form of bankruptcy.
2) Chapter 13, also known as
reorganization bankruptcy. This is designed to let
debtors pay off their obligations over a period of three to five
years and is for those individuals who have non-exempt property
they want to keep. Exempt assets vary from state to
state. People choosing Chapter 13 also have to have a
reliable and sufficient income to ensure that the debt payments
are made.
You will need an attorney to file bankruptcy to
ensure that all that paperwork is filed correctly and in a
timely manner. In most states, bankruptcy attorney fees
are between $750 and $2,000 to consult with you (the actual
filing fee is usually around $300), do the filing and appear in
court. It may seem like a lot of money for a quick
process (particularly Chapter 7), but it is worth it to gain a
fresh start.
If you need to file bankruptcy or have questions
about the process or which option is best for you, contact
us. We can put you in touch with an affordable
bankruptcy lawyer in your state, and our bankruptcy attorney
fees are very reasonable.