A Few Things To Consider Before 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.
In Chapter 13 bankruptcy, the debt is not eliminated. Instead, the court comes up with a plan for repayment which they determine to be within the filer’s means. Credit is then rehabilitated by payments made through this court-approved plan.
Chapter 7 bankruptcy does wipe out most unsecured debt. However, there are certain types of debt not discharge-able through Chapter 7. These types of debt include:
Child Support
Spousal Support
Most Student Loan Debt
Property Taxes
Income tax going back less than 3 years
Effect of Bankruptcy on Credit Score
Many people balk at the idea that when you file for bankruptcy, it remains on your credit report for ten years. Although this is definitely a point to consider, it may not be as as big of a deal as you think. If you are thinking about filing for bankruptcy, chances are that your credit score was ruined a long time ago. Of course, if you are able to pay off your debts on an individual basis, or if they are scheduled to disappear from your credit report shortly, then it would be better not to file. But for most people, once bankruptcy has become a real possibility, its effect on their credit score will not make a huge difference.
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
There are a few other ways to file bankruptcy besides contacting an attorney. Federal Bankruptcy forms are available for download, and you can fill them out yourself. Be advised, however, that this is not the best idea unless you have a strong knowledge of the ins and outs of bankruptcy laws. Some companies provide bankruptcy software, which works similarly to tax-preparation programs, guiding you through the process of filing. Another option is full online service, in which a paralegal prepares your forms. However, the online preparer is not a lawyer and can give no legal advice.
Bankruptcy attorneys generally charge between $1,000 and $2,000 for their services, and there is a filing fee of about $300. If you truly have no other option, bankruptcy can be a way for you to make a new start, and may be worth the fees to have an attorney who will advise and guide you through the process. Whatever you decide, make sure you have considered all possible options.
What exactly is a Los Angeles Bankruptcy Attorney? There’s valuable information regarding the loopholes of bankruptcy and what you should do. Make sure you talk to bankruptcy lawyers before it gets too late!
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