A Few To Know Before Calling A Los Angeles Bankruptcy Attorney
Although bankruptcy can seem like a magical way of dealing with your debt, the idea of actually filing can also be intimidating and confusing. Perhaps you were watching television and saw an advertisement for a Los Angeles bankruptcy attorney. You may have seen an ad online or in a newspaper or magazine, as well. Bankruptcy is beginning to look like a viable option for you. However, before you decide whether or not to file, you should educate yourself as much as possible about the process. Here are a few basic facts about bankruptcy.
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.
In Chapter 7 bankruptcy, most unsecured debt (such as credit card debt) is liquidated. Many types of unsecured debt, however, cannot be discharged through Chapter 7. Some of these types of debt are:
Child Support
Spousal Support
Most Student Loans
Property Taxes
Income tax going back less than 3 years
Effect on Credit Score
Many people balk at the idea that when you file for bankruptcy, it remains on your credit report for ten years. Although this is definitely a point to consider, it may not be as as big of a deal as you think. If you are thinking about filing for bankruptcy, chances are that your credit score was ruined a long time ago. Of course, if you are able to pay off your debts on an individual basis, or if they are scheduled to disappear from your credit report shortly, then it would be better not to file. But for most people, once bankruptcy has become a real possibility, its effect on their credit score will not make a huge difference.
Bankruptcy Abuse Prevention and Consumer Protection Act
Put into effect in October 2005, this piece of legislation changed the terms surrounding bankruptcy. It implemented a means test, which determines whether a potential filer’s income is low enough, compared with their debt and based on the calculation of a state-specific median income, to qualify for bankruptcy. It also mandates that anyone filing for bankruptcy must undergo a one-hour counseling session with a non-profit credit counseling agency, in which they discuss all options for dealing with the debt. They must provide written proof of this counseling session when filing.
Other Methods of Filing
Contacting bankruptcy lawyers is not the only option you have for filing. You may download the federal bankruptcy forms and fill them out yourself, although this option is not advisable unless you have an in-depth knowledge of bankruptcy laws. There is also bankruptcy software available, which works much like tax-prep software in that it guides you through the filing process. You can also use a full-service online preparer, although this person is not an attorney and cannot offer legal advice. They simply prepare the forms for you.
It costs $300 to file, and attorneys generally charge $1-2,000 in fees. Although you should do as much research as possible, and not enter into the decision lightly, it may be that bankruptcy is the best choice for you. If that is the case, it definitely may be worth the fee to have the guidance of an attorney. Explore all possibilities before making your decision.
Looking for the assistance of a Los Angeles Bankruptcy Attorney? There’s valuable information regarding the conditions of bankruptcy and what you should do. Make sure you talk to bankruptcy lawyers soon and find out your options!
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