Filing For Bankruptcy

There Are Alternatives To Bankruptc
Bankruptcy Should Be Your Last Resort!

If you are contemplating bankruptcy it is very important that you understand what bankruptcy is in order to determine whether filing bankruptcy is right for you. It is also important to know that there
are several alternatives to bankruptcy. You can learn about these alternatives by exploring our website or by completing the form on
the right to apply for a FREE Debt Consultation. There is absolutely
no obligations and a certified debt counselor can help you determine the best option for your particular needs.

If you have already decided that bankruptcy is the right alternative for you we can help you locate a qualified bankruptcy attorney in your area. There is no obligation. Simply call toll-free 877-828-0606.

What is Bankruptcy?

There are two types of consumer bankruptcy. Each is intended to
help consumers in financial crisis to get out of debt but the solutions offered are very different.

Chapter 7 bankruptcy can eliminate unsecured debt (credit cards, medical bills, old utility bills, unsecured personal loans, etc.), and generally can be completed within just a few months. In Chapter 7 bankruptcy, the trustee can liquidate non-exempt assets to pay creditors, but most people who file for Chapter 7 do not have any
non-exempt assets, and so are able to keep their property while eliminating unsecured debts.

Chapter 13 bankruptcy is often the solution of choice for people who have a lot of secured debt, such as, car loans and mortgages, and want to keep the property that serves as security for the loans. In a Chapter 13 case, the debtor enters into a repayment plan that allows 3-5 years to catch up on past due payments.

Note that since the new bankruptcy law there have been a lot of misunderstandings about bankruptcy. Many people have been led
to believe that almost no one can file for Chapter 7 anymore. That’s simply not true. Although the new bankruptcy law added hoops to jump through, bankruptcy attorneys and credit counseling agencies have found that the "Chapter 7 means test" actually prevents very
few debtors from filing under Chapter 7.

The New Bankruptcy Law

It is important to understand that debtors who are considering filing for bankruptcy must first go through a certified Consumer Credit Counseling Service prior to filing bankruptcy. All potential bankruptcy filers must now undergo credit counseling via an approved nonprofit budget and credit counseling agency prior to filing for bankruptcy. Chapter 13 filers must also complete a course in “personal financial management” prior to filing for bankruptcy.

The new Bankruptcy Act of 2005 requires that all consumers seeking protection to complete a bankruptcy counseling session and receive a Certificate of Completion before anything can be filed. This provision ensures that consumers understand all of their financial options, and that they have the necessary knowledge and tools to develop a sound financial plan for their financial future.

There are many changes and requirements in the new bankruptcy act. For example, under the old law, filers had a presumption of eligibility to file under Chapter 7, with the final determination made by judges, who evaluated the specific nature of each bankruptcy. In lieu of this judicial discretion, the new law substitutes a means test to determine whether filers have enough income to pay some portion of their debts, and thus file under Chapter 13. You can learn more about the new Bankruptcy Act at Guide To Understanding The Bankruptcy Abuse Prevention & Consumer Protection Act.

The bottom line is whether you are seeking debt relief through the enrollment in a Debt Management Program, or through Bankruptcy, you will need to work with a certified Consumer Credit Counseling Service in order to move forward.

To learn more or to speak to a certified debt counselor who can help you through the process, we highly suggest that you complete the form on the top of this page to apply for a FREE Debt Consultation. There is absolutely no obligations and a certified debt counselor can help you determine the best option for your particular needs.

If you're undergoing financial hardship, don't wait until bankruptcy is your only viable option. Check out the resources available to you on our website, and do consider a FREE Debt Consultation.