When you want to declare bankruptcy, you’re probably going to explore all options, before you do so, and I don’t blame you!  If you’re in the process of declaring, I would highly recommend that you get a bankruptcy attorney to help you with all the needs that you may have.

While there are far more cons than there are pros when it comes down to the bankruptcy process, let’s compare the two, and you can decide in the end on what is going to work the best for you.

The Pros of Declaring

You’re going to get the creditors off your back.  No longer are they going to call you and harass you for your payments.  Keep in mind that some debt will stay with you forever, such as student loans.

Many states will allow you to keep your car, home, as well as other living essentials.  Make sure you know your state laws.

Now, you will be able to start from scratch.  Consider it a clean slate, where you can learn from your past mistakes.

If you file the Chapter 7 route, you may find that the process is relatively quicker than you thought, with an attorney.

The Cons of Declaring

This will significantly hurt your credit score.  You will find that it will be very hard to get any type of loan, whether it’s a car loan, or mortgage.

While it may be on your report for 7+ years, many employers today will run a credit check on you.  If you want to get a potential job, you will find that you could be denied employment.  Yes, it’s unfair, but its the way of life today.

All the credit cards that you have today are going to disappear.

Again, some loans such as student loans will stay with you.  You will find that many bills will stay with you, and bankruptcy will only get rid of credit card bills, etc.

The public will know, as your name will pop in the newspaper.

Should you declare?

I would recommend that you consult with an attorney.  While you can read until you pass out, there’s a lot of false information floating around the Internet.  It’s up to you to do decide on if you should declare, or fight hard to pay off your debts.

Filing Chapter 7 bankruptcy is generally the first step that you’re going take when it comes down to cleaning out all of your bills and more.  Hopefully by now you’re going to find that an attorney is going to be a very important asset, as they are going to guide you along the process.

When you file for Chapter 7, the process can take up to 60 days.  When you file, the creditors are all going to be notified of your upcoming bankruptcy.  Even though you filed, you’re still going to get calls, as well as letters.  If you’re going to respond to these, let them know that you have claimed bankruptcy and leave them at that.

In the next few weeks, the calls and letters should dwindle down, as they will get notified.

When you’re called to your hearing (within 60 days generally), you will be asked about everything that you have put down when you filed.  When you filed, you more than likely listed all the bills that you owe.  The court will ask you some questions, as well as make sure everything is 100% accurate.  If there are no problems, this process is relatively easy.

The court process generally isn’t that long.  It will usually take less than a half hour, as long as everything is in place.

Once you find out that everything is in order, you’re going to be able to be discharged.  All the debt that you have cleared will no longer be your responsibility.

While bankruptcy can clear your debts, it’s going to hurt your credit score for a long time.  During this time, you will find that it will be very hard to get mortgage, loan, or anything else.

All processes vary during Chapter 7 and remember that it is always best that you sign up with an attorney before you go in and do it yourself.

Every state is different when it comes down to filing for bankruptcy.  Since there are so many factors that you’re going to have to dig into, I thought I would write up this post to help you better understand the situation and how much you’re going to have to set aside.

No, you’re not going to be able to declare bankruptcy for free, or include the bankruptcy fees into your filling, because no one is going to work for you.  This is why its important that you save up a little extra cash in order to afford your attorney.

Taking a look at bankruptcy costs

To file in a local courthouse, you’re going to have to more than likely pay around $300 to file for either Chapter 7 or Chapter 13.  You can always refer to the court system to see what the exact pricing is, but usually it will be around $300.

Paying for your attorney

You will need an attorney 99% of the time.  If you think you can get away without having one, you’re wrong, because there are so many forms to fill out, as well as procedures to take.

All attorneys are going to be different in pricing.  You will find that some will allow you to pay in installments, while others will want a full payment up front to avoid being stiffed in the future.

You will want to price a few attorneys in your area, but plan on paying upwards of $2,500 for an attorney in your area.  If you really want to get your money worth, I would recommend going with an experience firm.  A younger lawyer may get the job done, but they can screw up as well.

In the end, if you save more than $3,000, you will be on the safe side.   I would say that you could pay as little as $600 with a cheaper attorney, but with someone that is experienced, as well as throw in filing fees, plan on paying around $2,500.

If you’re thinking about declaring bankruptcy, or you just want to know which each chapter is all about, I wanted to give you some pointers on what each bankruptcy does for you and how you can file.

Now, before you set out and file, you’re going to want to make sure that you really need to.  There are a lot of people out there that think they need to, but they come to find out that with a little hard work and motivation, they can pay off their bills relatively fast.

Chapter 7 Bankruptcy

Let’s start out with this first since it is the most common out of the two.  With Chapter 7, you will either have all of your debts discharged, or it may be partially.   The judge may force you to sell your assets to repay some of your older debts.

Once you declare Chapter 7, all of your older debt collectors may not contact you after the process has been done.  There are debts such as student loans and more that will never go away, so be sure to ask about these when consulting with an attorney.

How do I file?

You will find that the court system will make you take a means test first.  This test is going to show the judge that you really do qualify for filing.  If you don’t pass this test, they may reference you to Chapter 13.  If you pass, you will have to work with an approved counseling agency.

Chapter 13 Bankruptcy

This one is a little bit different than Chapter 7.  Under this process, you will have to repay all or even parts of your debts over a certain time period.  You and the courts will have to work out some sort of repayment plan.  You will pay the courts once approved and from there, they will pay your creditors.

The creditors are still going to get your money, but the judge is going to have the final say on what they are going to get.  When filing for Chapter 13, you will owe a lot less than you would before, but you will still have to pay over time to what the judge deems fair.

These are the 2 most common types.  If you find yourself in some financial trouble, be sure to meet with a bankruptcy attorney.  What you’re going to find is that they will be able to guide you on what’s best for you.