Is A Do It Yourself Bankruptcy Right For You?

Is A Do It Yourself Bankruptcy Right For You?

It is not hard to accumulate debt. Credit cards, car payments, mortgages and medical bills can get out of hand. Combined with a damaged economy and an increase in job loss, debt can spiral out of control.

In many cases, the only way out is to file for bankruptcy. Unfortunately, hiring a lawyer may not always be an option when you do not have the financial means to pay for legal services. Do it yourself bankruptcy is an option, but you need to understand more about bankruptcy and whether filing on your own is the best choice.

Chapter 7 Bankruptcy:

One of the most common bankruptcy types chosen is the Chapter 7 Bankruptcy. Starting over is possible because wiping the slate clean is what the Chapter 7 allows and the reason it is commonly used.

For example, if you have a mortgage or similar type of payment (like a car payment) that you are not in default on, many states will count this as an exemption. If you meet all the requirements for Chapter 7 in your state, you can easily file yourself, saving time and money.

Chapter 11 Bankruptcy:

This option is for corporations as opposed to individuals. Chapter 11 is for businesses who are closing or soon to close.

Filing a Chapter 11 will often require a lawyer because it is so complicated. It involves a complete liquidation of all assets. The funds are then divided to pay off the corporation's debts.

Do It Yourself Chapter 13 Bankruptcy:

This option is often taken by individuals who do not qualify for Chapter 7. This do it yourself bankruptcy involves a repayment plan for the debt, decided by the court and normally spanning a period of three to five years. The amount of the debt is often reduced by the judge as part of this action.

As a more complicated bankruptcy you may not be able to do a Chapter 13 yourself. Seeking legal counsel may be an order from the judge if you do make the attempt on your own to file.

Filing bankruptcy is not a decision you should take lightly. Understanding what the process can potentially do to your finances as well as understanding the true bankruptcy cost is necessary and can be obtained by doing your homework as you should be absolutely sure of everything involved before you begin this venture.

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