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Bankruptcy FAQ

What's the difference between Filing for Chapter 7 and Chapter 13 Bankruptcy?

Chapter 7 will allow you to eliminate certain types of debt altogether, while Chapter 13 is mostly about reorganizing and managing your debt. There are advantages and disadvantages to both, and in some cases you may only qualify for Chapter 13 depending on your circumstances. A complete evaluation of your circumstances is necessary to determine what's best for you. There are many consumer websites that go into great detail about the Chapter 7 and 13, but consulting with a Bankruptcy Specialist will help you wade through the myriad of details and get you to the best possible solution the fastest. We offer a free consultation by appointment, so please don't hesitate to call.

What will it cost?

The government filing fees associated with file for Chapter 7 or 13 are around $300. Legal services vary by situation so it's difficult to give a specific amount. The better that you organize your information and have all of the necessary paperwork needed, the less work your lawyer will have to do; and that can help toward the final cost. We can usually give you a good idea of how much it will cost during our consultation. Our pledge to you is that we will discuss all fees upfront so that there won't be any surprises later.

I've seen cheap Bankruptcy Services advertised on TV and the internet. How come some people can do it so cheaply?

Not everyone offering Bankruptcy Services is a lawyer. There are companies who are only preparers - they will simply fill out paper work and file it with the courts. They cannot give any legal advise and cannot fully represent your interests or advise you on legal ramifications, alternatives, etc. In the end, you get what you pay for and if your are to the point of considering bankruptcy this is the time to be cautious and get as much knowledge and help as possible... something only a trained legal professional can provide.

I'm told that not all debt is the same and that sometimes even filing for bankruptcy won't relieve me of all of my debt.

It is true that filing for bankruptcy will not release you from certain debt obligations, which is why it is so important to consult with a legal expert. Bankruptcy will relieve you of most unsecured debt - that is, debt that was incurred without putting something up for collateral. When you put something up as collateral you have a Secured Debt. A Secured debt cannot be wiped clean by bankruptcy filing unless the collateral is surrendered and you have not agreed to repay the debt by signing a reaffirmation agreement, however it can often be re-organized and managed.

Will I ever be able to borrow money again?

Bankruptcy is considered a fresh start because it is much like starting your financial life over. When you first became a legal adult and could borrow money without a parent's consent you had to "build" your credit. The difference this time is that you must also "repair" your credit reputation. You can borrow from anyone willing to lend, but that can be the difficult part. It will be your responsibility to show lenders that you will be a safe risk. You may want to start by borrowing with a secured loan (providing some sort of collateral) and be sure to make all payments on-time. Any slip up at this point will be magnified. The point is, you will be able to borrow again, but you will have to be especially careful to safeguard you new credit history.

My home is being foreclosed. What can I do?

Since a mortgage is a secured debt it cannot be discharged through Chapter 7. However, through Chapter 13 we can help work out a plan for you to repay your mortgage. We may also be able to eliminate 2nd mortgages through a Chapter 13 Bankruptcy.

What are the requirements for filing bankruptcy?

You are required to meet certain criteria in order to file for bankruptcy. This is called a "means test". It is used to determine which type of filing (either 7 or 13) is in order and if your income or ability to pay unsecured loans is at or below the maximum amounts.

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