Some Things To Know Before Calling A Los Angeles Bankruptcy Attorney
Considering Contacting 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
Several different chapters of bankruptcy exist. Chapter 12 is available to family farmers and fisherman. Chapter 11 usually pertains to businesses. The two types generally 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.
If you file Chapter 7, most of your unsecured debt, such as credit card debt, is in fact wiped out. There are some types of debt that cannot be liquidated through Chapter 7, however. These include:
Child Support
Spousal Support
Most Student Loans
Property Taxes
Income tax going back less than 3 years
Effect of Bankruptcy on Credit Score
Bankruptcy does indeed stay on your credit report for up to ten years, which is definitely something to consider when deciding to file. However, in most cases, once bankruptcy becomes a realistic option, the individual's credit score is already ruined. If paying off your debts one by one is a possibility, or if several of your debts may fall off of your credit report in the near future, perhaps bankruptcy would indeed have an unnecessary negative effect on your credit score. However, by the time most people begin seriously considering bankruptcy, the effect on the credit score is of minimal importance.
Bankruptcy Abuse Prevention and Consumer Protection Act
This law went into effect in October 2005, and changed some of the circumstances around filing for bankruptcy. At this point, a filer's income is subject to a means test, which looks at the debt beside the individuals income, and determines whether the income falls below a median that varies by state. This decides whether or not the person qualifies for bankruptcy. Another change is that now, prior to filing, you must go through an hour long debt counseling session with a non-profit debt management agency, to explore all options for dealing with the debt
Other Methods of Filing
Hiring an attorney is not the only way to file for bankruptcy. Federal bankruptcy forms can be downloaded, and if you are comfortable with your own grasp on bankruptcy laws, filing on your own may be an option. You can also purchase bankruptcy software, which works like the programs available for tax preparation in that it guides you step by step through the filing process. There are companies that offer full service prep online, but they cannot offer any legal advice.
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.
by: DarvishLaw
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