| Types of Bankruptcy |
 |
 |
 |
Types of BankruptcyAlternatives to bankruptcyBankruptcy is considered to be the most drastic debt elimination option, and most people try to avoid filing as much as possible. Although there are a number of different types of bankruptcy, the most common two for consumers are Chapter 7 and Chapter 13. Chapter 7 Chapter 7 is considered a “Clean Slate” Bankruptcy and is the more severe of the two. Clients filing Ch. 7 bankruptcy must be submitted to a means test that will determine their eligibility. Upon approval, the individual will be assigned a court-appointed representative to determine which of the filer’s property is to be auctioned off to pay back creditors (Each state has a list of exempt and non-exempt property along with exemption limits). Once the individual’s assets have been exhausted, the courts will absolve him or her of any legal responsibility to pay the remaining debt. Even though the individual may be forced to sell some of their property, he or she will be completely free of unsecured debt at the end of the process. It is important to note that secured debt including car payments, mortgages, alimony, child support, taxes, student loans, as well as court ordered fees can not be erased by the process. Chapter 7 is best for individuals who are making less than the state average income and who are not able to afford a debt consolidation or debt settlement program. The current bankruptcy filing fee is $299.00 for Chapter 7. This value is subject to change and does not include attorney fee. It is recommended that individuals hire a bankruptcy attorney to avoid any mistake when filing for the bankruptcy. Attorneys’ fee rate from $200-$300 per hour on average, but this price can vary according to location and the individual attorney. Chapter 13 Chapter 13 bankruptcy is considered the “Working Man’s” bankruptcy. With the help of the court, individuals must construct a structured partial repayment plan to pay back their creditors. On average, an individual will pay back between 30-50% of their total debt over a 3-5 year period. In return for paying back a percentage of their unsecured debt, individual who file Chapter 13 are allowed to retain a greater amount of their assets and can help avoid foreclosures and evictions from homes. Just is the case for Chapter 7, Chapter 13 does not erase secured debts such as mortgages, car payments, student loans, or other debts such as taxes, alimony, child support, and court-ordered fees. Chapter 13 is best for individuals who are working and earn more than the state average income but who can not afford a debt consolidation or debt settlement program. The current Chapter 13 bankruptcy filing fee is $274.00. This value is subject to change and does not include attorney fee. It is recommended that individuals hire a bankruptcy attorney to avoid any mistake when filing for the bankruptcy. Attorneys’ fee rate from $200-$300 per hour on average, but this price can vary according to location and the individual attorney. Here more information For bankruptcy protection, enter bankruptcy protection E-mail us to solve doubts about bankruptcy alternatives, types of bankruptcy for free. Get free consultation and help. |