| A Few To Think About Before Calling A Los Angeles Bankruptcy Attorney |
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| Written by Alon Darvish |
| Monday, 28 December 2009 17:44 |
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If you are thinking of filing for bankruptcy, you probably have lots of questions. Before making this decision, you should educate yourself as much as possible about the process. You will not have a hard time finding a Los Angeles bankruptcy attorney. However, before you decide to contact one, you should do a bit of research on your own about bankruptcy. It can seem like a magical solution, but there are many factors to consider. Here are a few things to think about when deciding whether or not to file.
If you are thinking of filing for bankruptcy, you probably have lots of questions. Before making this decision, you should educate yourself as much as possible about the process. You will not have a hard time finding a Los Angeles bankruptcy attorney. However, before you decide to contact one, you should do a bit of research on your own about bankruptcy. It can seem like a magical solution, but there are many factors to consider. Here are a few things to think about when deciding whether or not to file. Types of Bankruptcy There are many different chapters of bankruptcy, including Chapter 11 (used mostly by businesses) and Chapter 12 (open to fisherman and farmers), but the two chapters most commonly filed by individuals are Chapter 13 and Chapter 7. When you file Chapter 13, you do not eliminate your debt. Instead, you enter into a court-approved rehabilitation plan, in which you make regular payments determined to be feasible when your income and expenses are examined. If you file Chapter 7, most of your unsecured debt, such as credit card debt, is in fact wiped out. There are some types of debt that cannot be liquidated through Chapter 7, however. These include: Child Support Spousal Support Most Student Loans Property Taxes Income Taxes Going Back More than 3 Years Effect of Bankruptcy on Credit Score The main disadvantage cited when cautioning individuals against bankruptcy of any chapter is that it stays on your credit report for up to ten years. Although this may deter some people, it is important to remember that if you are considering bankruptcy, your credit score is probably in pretty terrible shape as it is. If you think you can pay off your debts individually, or if they are close to falling off of your credit report, then the effect of bankruptcy on your credit score is something to take into serious consideration. However, if you are in a position where your credit score has no chance of improving in the next 10 years anyway, then this is not of much concern. Bankruptcy Abuse Prevention and Consumer Protection Act This law went into effect in October 2005, and changed some of the circumstances around filing for bankruptcy. At this point, a filer's income is subject to a means test, which looks at the debt beside the individuals income, and determines whether the income falls below a median that varies by state. This decides whether or not the person qualifies for bankruptcy. Another change is that now, prior to filing, you must go through an hour long debt counseling session with a non-profit debt management agency, to explore all options for dealing with the debt Other Methods of Filing There are a few other ways to file bankruptcy besides contacting an attorney. Federal Bankruptcy forms are available for download, and you can fill them out yourself. Be advised, however, that this is not the best idea unless you have a strong knowledge of the ins and outs of bankruptcy laws. Some companies provide bankruptcy software, which works similarly to tax-preparation programs, guiding you through the process of filing. Another option is full online service, in which a paralegal prepares your forms. However, the online preparer is not a lawyer and can give no legal advice. The fees for a bankruptcy attorney are usually between $1,000 and $2,000. The fee to file is about $300. Bankruptcy can be a new beginning, and you may determine that the fees of hiring a lawyer are worth the peace of mind you will gain from having your debt under control. Make sure you educate yourself and stay informed through every step of the process, whatever your decision. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Trying to find a Los Angeles Bankruptcy Attorney? Find out all of the loopholes of bankruptcy and what is best for your situation. Make sure you talk to bankruptcy lawyers soon and find out your options! |