Need To File Bankruptcy For Free

You may be wondering if an individual can file for bankruptcy for free

. The bad news is you have to spend money in order to file your bankruptcy. The good news is filing for bankruptcy do not need to be expensive.

If you need to file bankruptcy for free or at least cut the normal cost of filing for bankruptcy then there a few things you need to learn to be able to do that. First thing to know about the subject of bankruptcy is the basics and processes. This will help you understand how to do things the cheaper way. So what is bankruptcy? It is the legal action of an individual or businesses can undertake to eliminate or pay part or the full amount of their debts they owe to their creditors.

There are two types of bankruptcy that are commonly filed. Chapter 7 is the first type of bankruptcy that liquidates the properties of a consumer in exchange for the elimination of the consumers debts. Not all properties of the consumer are liquidated. There are properties which are called exempt properties which are properties the consumer can keep. If the proceeds of the liquidated properties do not cover the full amount of debts, the remaining debts are forgiven or canceled. Before one can file a chapter 7 type of bankruptcy, he or she needs to pass a means test. This test is a way to prove that an individual is eligible to file for a chapter 7 type of bankruptcy. The means test is a way of knowing if a debtor cannot really pay his debts or if the debtor is just faking it.

The next type of bankruptcy is chapter 13 which is a reorganization or repayment plan. This is bad news for people who need to file bankruptcy for free. The reason is because chapter 13 takes longer to file than chapter 7 and it cost more because you need to avail some services from a credit counseling agencies to help you make a repayment plan which you need to file for this type of bankruptcy. The new bankruptcy law which was made effective last October 2005 under the BAPCPA clearly states that it is required for every individual who wants to file bankruptcy to attend a credit counseling sessions provided by a credit counseling agency, adding up to that is you need to document your attendance which is also required by the new law.

Once you know which type of bankruptcy you will need, you can now think of ways to file bankruptcy. There are many ways to file bankruptcy. If you want the easy way just hire a bankruptcy lawyer fulltime and he will do all the work for you, guide you through the process and provide you legal advice. This can be expensive considering you have problem with money. The way I suggest you can do is to find a petition preparer or bankruptcy lawyer to prepare your papers. After paying their flat fee you can do the rest of the filing by yourself. For more support on how to file bankruptcy, visit the link below.

by: Steve

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