Bankruptcy
What Is Bankruptcy and What Can Bankruptcy Do for You?
Bankruptcy may make it possible for you to:
• Eliminate the legal obligation to pay most or all of
your debts. This is called a “discharge” of debts.
It is designed to give you a fresh financial start.
• Stop foreclosure on your house or mobile home and
allow you an opportunity to catch up on missed
payments. (Bankruptcy does not, however,
automatically eliminate mortgages and other liens on
your property without payment.)
• Prevent repossession of a car or other property, or
force the creditor to return property even after it
has been repossessed.
• Stop wage garnishment, debt collection harassment, and
similar creditor actions to collect a debt.
• Restore or prevent termination of utility service.
• Allow you to challenge the claims of creditors who
have committed fraud or who are otherwise trying to
collect more than you really owe.
What Different Type of Bankruptcy Should I Consider?
Chapter 7
• Chapter 7 is known as “straight” bankruptcy or
“liquidation.” It requires an individual to give up
property which is not “exempt” under the law, so the
property can be sold to pay creditors. Generally,
those who file chapter 7 keep all of their property
except property which is very valuable or which is
subject to a lien which they cannot avoid or afford to
pay.
Chapter 13
• Chapter 13 is a type of “reorganization” used by
individuals to pay all or a portion of their debts
over a period of years using their current income.
What Does It Cost to File for Bankruptcy?
• It costs $299 to file for bankruptcy under chapter 7
and $274 to file for bankruptcy under chapter 13, whether for
one person or a married couple. The court may allow you to pay
this filing fee in installments if you cannot pay it all at
once. If you hire an attorney you will also have to pay the
attorney fees you agree to.
What Must I Do Before Filing Bankruptcy?
• You must receive budget and credit counseling from an
approved credit-counseling agency within 180 days before your
bankruptcy case is filed. The agency will review possible
options available to you in credit counseling and assist you in
reviewing your budget. Different agencies provide the
counseling in-person, by telephone, or over the Internet. If
you decide to file bankruptcy, you must have a certificate from
the agency showing that you received the counseling before your
bankruptcy case was filed.
• Most approved agencies charge between $30/-/$50 for the
pre-filing counseling. However, the law requires approved
agencies to provide bankruptcy counseling and the necessary
certificates without considering an individual’s ability to pay.
If you cannot afford the fee, you should ask the agency to
provide the counseling free of charge or at a reduced fee.
• If you decide to go ahead with bankruptcy, you should be
very careful in choosing an agency for the required counseling.
It is extremely difficult to sort out the good counseling
agencies from the bad ones. Many agencies are legitimate, but
many are simply rip-offs. And being an “approved” agency for
bankruptcy counseling is no guarantee that the agency is good.
It is also important to understand that even good agencies won’t
be able to help you much if you’re already too deep in financial
trouble.
• What is the next step?
If you think bankruptcy is the option for you call today to setup your free “30 Minute consultation”Call (734-404-3000) Or visit aldrichlegalservices.com
