Free Consumer Bankruptcy Information
It is a sad fact that the economy is not getting any better and many people, in a search for relief, begin to consider bankruptcy. If you are seriously contemplating filing for protection, you should know that you are not alone.
According to the Governments consumer bankruptcy information and statistics on the United States Courts website, in a twelve-month period ending on December 31, 2012, over 1,221,091 bankruptcies were filed. Out of that, 843,545 of them were chapter 7 bankruptcies and 366,532 were chapter 13 bankruptcies; only chapter 7 and chapter 13 are considered consumer bankruptcy, the rest are reserved exclusively for businesses and corporations.
However, before you seek out and spend money on a bankruptcy lawyer, here is some free consumer bankruptcy information that can help you decide if you need an attorney as well as helping you decide if you should file a chapter 7 bankruptcy or a chapter 13.
Leading Cause of Bankruptcy
According to the United States Courts website, over 60% of all bankruptcies filed are a result of overwhelming medical expenses. When you couple the medical expenses with the fact that those very same people are reduced in their ability to earn an income, one can see how this creates a death spiral in individual’s finances.
The other leading cause of consumer bankruptcy is loss of income. The fact is that jobs are disappearing at an alarming rate and many companies are reducing hours or reducing staff in order to avoid massive costs with changing legislation. In either case, the end result has been a massive increase in individuals and families filing for protection.
Bankruptcy Chapter 7 vs Chapter 13According to the most recent consumer bankruptcy information available, there are only two forms of bankruptcy protection that you, as a consumer, can file for; you will file either a Chapter 7 or a Chapter 13. The reason they are called “Chapter’s” is because it is a reference to the Chapter under Title 11 of federal law where the rules regarding that particular filing can be found. Title 11, is the United States Bankruptcy Code.
Just like there are several different types of bankruptcies, there are several different types of bankruptcy lawyers; however, the two that you should focus on are the ones that deal specifically with thee afore mentioned consumer bankruptcy.
- A chapter 7 bankruptcy lawyer is a lawyer that specializes in the form of bankruptcy that is a complete liquidation of all assets and a complete discharge of a consumers debt.
- A chapter 13 bankruptcy lawyer is a lawyer that specializes in the form of bankruptcy that is a reorganization of debt; this reorganization centers on a repayment plan, of your debt, administered by a trustee of the court.
Filing for a bankruptcy should be a last resort. You should be aware of all of the ramification of filing a bankruptcy, including the effect it will have on your credit worthiness. In fact, a good bankruptcy lawyer should address those issues with you.
What Are Some of the Consequences
According to the most current consumer bankruptcy information available, all bankruptcies, whether chapter 7 or 13, are reported on your credit report; most individuals believe that a bankruptcy will stay on their credit report for up to 10 years, but that is just not the case for a Chapter 13 bankruptcy.
According to their most recently published consumer bankruptcy information Experian’s, a major credit reporting agency, reports that a chapter 13 stays in effect until all the debt is paid and/or discharged, then it continues on your credit report for an additional 10 years after the date of your last payment.
For example, lets say, based on the consumer bankruptcy information you researched, you decided to file a Chapter 13 bankruptcy. After everything is said and done, you are placed on a 5-year “restructuring” plan. You comply with the court and complete the five-year program. The entire time you are under the Chapter 13 bankruptcy repayment plan, all of your debts are being reported as being under that Chapter 13. Now, five year later you are done but the Chapter 13 will continue to report for an additional 10 years. Added all together it is a grand total of 15 years on your credit report.
Make sure you check with a chapter 13 bankruptcy lawyer to make sure you are well aware of all of the ramifications and best ways to rebuild your credit after bankruptcy.
How Does it Work
You should also be aware of the fact that different bankruptcies can take different amounts of time. You should not believe a bankruptcy attorney if the tell you it will be fast and easy with out reviewing your file first because bankruptcies rarely are fast, or easy. It is a clear sign that the bankruptcy lawyer you are talking to is a bad one and just after your money. Most good bankruptcy lawyers will understand your financial duress and charge a flat fee to handle your bankruptcy and many will even offer a form of payment plan.
In short, depending on the type of bankruptcy you choose, based on current consumer bankruptcy information, you will first have to file a petition with the court. Then you will have to go through the arduous process of listing all of your assets and liabilities. Then you will have to attend mandatory before and after debtor educational classes. Then you will have to meet with a trustee of the court who will make a determination of your eligibility, payment arrangements, whether or not you can reaffirm a debt, and allow an opportunity for any of your creditors to appear and make a case as to why you should still pay them. Never ever lie and never ever hide anything, it will come back to haunt you. Especially if one of your creditors finds out and files a motion to invalidate your bankruptcy protection because you lied about or hid your assets. Finally, after all of this, your case goes before a judge. They will issue a preliminary finding and give your creditors one more time to show cause, called an “adversarial proceeding.” If nobody contests, you will normally get a final “notice of discharge” about 75 to 90 days after the first meeting of creditors.
Why You Need a Bankruptcy Lawyer
While you can find a plethora of consumer bankruptcy information online and on government websites, not all of the information is complete or totally accurate. In fact, complete and total consumer bankruptcy information is hard to find.
For example, many websites make no mention of the Bankruptcy Abuse Prevention and Consumer Protection Act, let alone that it was enacted in 2005. This is one of the most important pieces of consumer bankruptcy information, and still most people have no idea as to the number of significant changes that it made to the United States Bankruptcy code. The fact of the matter is that it actually made it much more difficult for consumers to file under Chapter 7 forcing many into Chapter 13 if they could file at all. This is just one of the many reasons why it takes a really good bankruptcy lawyer to get through the process.
Every case, and every person’s situation, is distinct and different. While most consumer bankruptcy information sites will tell you that you can file your own bankruptcy petition, it is highly recommended that you don’t. You have to pay filing fees, and if you make even the smallest of mistakes the case will be “dismissed” or thrown out and you will have to start all over again.
Even worse, is that if you decide to do your own filing, you wont have the protection of a bankruptcy lawyer. Did you know, that the minute you hire a bankruptcy lawyer, creditors and debt collectors could no longer call you or harass you about your debt? They have to call your attorney.
Do yourself a favor, research and read as much as you can on consumer bankruptcy information, develop a really good set of questions and then call a bankruptcy lawyer, it will be worth every penny.
Last Modified: Thursday, June 13, 2013