Bankruptcy process – What is it actually?

There are different types of bankruptcy, are you talking about complete liquidation? The first step is to see an Attorney for a consultation, usually most Attorney's offer a free initial consultation. With the new bankruptcy laws, you can then see if you qualify. I can tell you that there is a massive amount of paperwork involved.

My mom recently filed chapter 7 bankruptcy through a company called US Bankruptcy Centers (www. usbankruptcycenters.com). They ran her credit reports and prepared all the forms for her. All she had to do was sign the forms and send them to the bankruptcy court in Milwaukee. A few weeks later she met with a trustee that asked her a few questions. She had to provide some recent paystubs to the trustee to show her income. Then she got her final discharge in the mail. She didn't have to appear in court and she didn't need an attorney. The hardest part about filing bankruptcy is filling out all the forms (around 50+ pages) but the bankruptcy place did all that for less than 200 bucks.

That's interesting, but I am sure there were some fees involved, how much did this end up costing her? Is this legit, for sure?

Erin, for 200 that is excellent. And yes it is legit if she already got her discharge papers from the court.

I actually did a search about this company at the BBB and didn't find anything. It seems almost too good to be true, I am definitely going to explore this further. That would be a wonderful solution for people who are not able to afford all the Attorney fees!

I could be wrong but I think it is too good to be true. At least here in Ohio you are required to go to court..............if they are legit, less than $200 is a heck of a deal though!

I'm a little skeptical myself, but, I hope it's for real!

That maybe less then $200 to do the papers - Which is about the same price as any online bankruptcy mill/preparer.

You still have to pay the filing fee of $300, and the counseling classes $100, so your total would still be at least $600.

Also, you are not required to go to court for a chapter 7, you only have to go to the meeting of creditors, which is what the OP described above.

It definately seems a little shady. As far as I know you do have to pay filing fees but I guess those are actually atty fees which could be avoided if you filed your own bankruptcy. But what about the classes. According to the new bankruptcy laws I thought that the only way that you could file for a bankruptcy is if you agreed to take counseling classes.

The filing fees are what you pay to the BK court to file the paperwork - Not avoidable.

The counseling classes cost $100 total - Not avoidable.

At best, it would cost you $400 to file for Chapter 7, and that is doing everything yourself. Any cost would start with that and then add on what you are paying someone else to do it.

Dear Garogarov,

I am giving the steps involved in filing chapter 7 bankruptcy: -
1. List the details (Name, Address, Debt amount) of all your lenders
2. Make a list of your properties
3. Take a detailed note of your monthly expenses required for your living
4. Now, fill up the bankruptcy form and submit it in your nearest court
5. After this the court will issue an ???????automatic stay??????? order on your accounts. This will bar your creditors from contacting you for debt recovery. In addition, they will also be restricted from filing any lawsuit against you or ask for wage garnishment.
6. 20 to 40 days after your petition filing you have to appear for 341 meeting which usually continues for 15 to 20 mins. In this meeting you have to sit in front of your creditors and explain your inability to payoff their debts. After hearing your point they will, for the last time, insist you to make 50% of their payment. If you are still unable to do that, then your creditors will cease from contacting you further.
7. Your petition will be accepted by the court and the trustees will liquidate your non-exempt assets.
8. Court will accept your discharge (generally takes 2-3 months) by sending an official mail of discharge notice.
9. Discharge notice will officially release you from paying off your past debts and thus restrict your lenders in taking any legal action against you or your property.

The costs involved in it include: -
??????? Fee for filing bankruptcy
??????? Surcharge for trustees
??????? Miscellaneous fees

The total costing of all the above mentioned fees comes round to $200. The payment of this sum can be made within a time frame of 4 months.

But it is always advisable to try and avoid bankruptcy because it will cause mayhem to your credit score and will remain in your credit report for 10 long years, though its intensity decreases with the passage of time.

So, before filing for bankruptcy, you should consult a debt counselor for avoiding negative consequences. You can also get a Free Counseling from one of the expert debt counselors of our community through the link: - http://www.debtconsolidationcare.com/debt-solution.html .

Regards,

Phoenix

hi garogarov,

Though you have already received some good advices from the other members of the site, I'm only trying to push my two penny worth of knowledge forward.

Its important that you decide first that whether you should file ch-13 or ch-7. Chapter 13 helps you to set-up a repayment plan with your creditors and can help you in protecting some of your assets, while ch-7 is more severe in nature. Hence, you need to decide first which way to choose.

If you have a regular income and have assets to protect, I'd rather request to look into the possibility of filing ch-13 instead of ch-7. And as Phoenix has suggested, try to avoid bankruptcy altogether if you can.

Phoenix - I think you are thinking of pre 2005 - With the new laws all BK's are federal and there are some very stict laws in place.

The filing fee is $300 - That is for Chapter 7.

The counseling costs $100

That is $400 total, that is the least you could possibly pay to file for Chapter 7 bk.

I don't know where you got the $200 total fee, but that is very old information.

Also, the paperwork to file for BK has increased since pre 2005, and there are pages and pages of papers to fill out. You make it sound very easy, but it is not as simple as listing your creditors and properties and filling out a form. It's actually now a very complicated process.

exactly goudah,that prevented me from filing.the bankruptcy laws have changed.i filled out about 10 pages at least of info.the fees are right too,plus you have to get a paper stating you went to a debt class,seminar i can't recall what it was,but you had to complete it before the debt test was given to make sure which bk you qualified for.things have changed from when my brother filed 10 yrs ago.

I was able to get a modification from the bank for my first mortgage, however the second mortgage will not cooperate at all. We have been in negotiations with the first and the second for two years. I am able to pay the first mortgage on time now but cannot pay the second. We have tried offering them a settlement, offering to pay a smaller amount than owed and we cannot get any help from them, we are now months behind on the second and have not even heard from them for several months. We believe that our only way out is to foreclose on our home and then file bankruptcy. Even then we are not sure if we can eliminate the debt. Any suggestions? We are desperate.

i want my life back after divorce so much old debt not a lot of income

I joined a debt settlement company in December of 2008 to try to pay off my wife's 13,000 credit card debt. I am being sued and I already paid 5000 into the company plus I sent them 5,500 to settle out of court on a previous lawsuit. I just sent them 1,750 3 weeks ago to try to avoid this lawsuit for the 2,060 she owes and I am having no luck yet and my court response answer is do in 2 weeks. I still have 2 other people that can sue me and haven't been receiving any mail from them. I still owe the debt company 5000. Should I try to approach these debt collectors on my own?

Here is what I don't get. Everyone screams to stay away from bankruptcy. Why? Well, because, its a nightmare. Okay, if someone is looking into filing bankruptcy, are they not already in a nightmare? Also, everyone screams don't do it because of the whole "your credit will take a hit" argument. Well, once again, if someone is looking into filing bankruptcy, has their credit not already taken many, many hits? I mean, I know bankruptcy is a nightmare, but, for crying out loud, isn't also being buried in more debt than you can pay off in 12 lifetimes also a nightmare? And as far as going to court, well, that argument falls apart as well, because, most likely the person looking to file bankruptcy is headed to court anyway when the creditors come after them. In all seriousness, if bankruptcy is a nightmare, are you not just trading one nightmare for another when you do file? You can either have the problems of dealing with harrassing phone calls and lawsuits, OR the hassle of bankruptcy. Either way, are the results not the same? I am about to file myself, and I have friends who have never even had a credit card (somehow went throught life and did everything with cash only) trying to tell me that I'm screwing up big time. Well, newsflash to them, I have already screwed up big time. Plus, I refuse to listen to those who have never even been in debt. Good for them that they were smart enough to never make mistakes with money, but that was not the case with me. Guess I was absent the day they were passing out brains. So, my stupid @ss had to learn the hard way about money. I'm going forward with my attempt at bankruptcy whether my "perfect with money" friends like it or not. As far as the "living hell" of bankruptcy goes, well, I'm already there. I have seen it, lived it, felt it, been committed and placed on suicide watch because of debt, been hunted down like a dog in the streets because of debt, been ridiculed by well, just about everybody, been so broke, I have had to pawn things, you name it. So, I ask, what can bankruptcy possibly throw at me that I have not already seen time and time again?

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To Cherbear, I say you should speak with a bankruptcy lawyer about your options. Many lawyers give free consultations and you could learn more about your options. While debt settlement has helped many people with their credit card debt, it may not help you get your mortgage debt under control. Dealing with debt is like anything else: You need the right tool for the right job.

I am about to file Chapter 13 becasue I am behind on my property taxes. My mortgage company has sent a letter saying they after 30 days they will pay the property taxes late property taxes and recent property and then start an escrow account. Can they do this and will I still be able to claim bankruptcy on the property taxes?

All I know is that 7 years after you stopped paying debt, it is wiped off your credit report, however, bankruptcy is on your credit report for 10 years and in general it is harder to rebuild your credit worthiness after filing bankruptcy. My advice is to avoid bankruptcy at all cost because for one thing 7 years is less then 10 years. There are situation where you just don't have to file bankruptcy, go to http://www.besthelpfinancial.com/bankruptcy.html to learn which situations you will not have to file for bankruptcy.

it is always better to avoid bankruptcy or filling bankrurtcy but sometime such situation arises that it get difficult to avoid any such situation in that case always get expert advice from a Bankruptcy Lawyer.
Solicitation removed.

just because you stop paying the debt, it doesnt mean it is wiped out. If that were true everyone would be okay. Some can run for awhile but it will catch up with you. Bankruptcy is not so bad. A lot of folks spend so much money trying to settle and then end up getting sued and everything else. Save your cash, file Chapter 7 and move on. As far as court goes, you go to a meeting with the trustee in a room with other people that are filing. You dont go to court per say unless you are being sued. File and move on with your life. I did over ten years ago. I bought a house and a car one year later. I get so sick of all the doom and gloom over filing. Some people dont have a choice!

you guys are cheaters when it comes to seo none of these comments are from real people

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LMAO at some of these comments. you think that for 10 years after filing bk that you won't get ANY credit card offers? you'll start getting offers in the mail within a year? i also have a friend that is a mortgage broker and he said he has people getting almost rock bottom refi rates after 3 years of a bk. you people need to do more research.

I simply do not agree with the premise that "debt consolidation" is a better option than BK. And, I believe your reasons listed are patently false or at best misleading.

- Debt consolidation badly damages your credit. Most creditors report "not paid as agreed".
- You lose only the property you wish to lose.
- While not all debts can be eliminated, the most heinous one can be. The ones that cannot are generally owed to the federal government. ANd you can always "consolidate" these remaining debts after BK.
- Property will not be repossessed if you have a good attorney and plan ahead for your BK.
- Adverse effects on your finances? No credit? You mean that I can not run up huge debts again? Sounds like a GOOD thing to me. Also, "consolidation" prohibits you from getting credit as well. And, if you BK and now have free cash to pay your expenses, you can afford what you need. Credit scores are debt scores - they only measure your debt load. Debt free and cash available is the best way to be. And getting a home, car, or rental is easy when you can pay cash.
- Most states protect ALL retirement plans. Only those plans that get overfunded by people trying to game the system get hit.

I know you have an agenda, but you owe it to people to tell the truth - that debt consolidation is worse than BK for a LOT of people. At best, it has the same effect, with few of the benefits that BK offers.

Well... I won't agree with you fully, BTS. I have gone through debt consolidation. Things are not like what you've said. Though, initially my credit was affected and few points were decreased, but once I started paying off the dues, the scores started rising. Moreover, the creditors even reported the accounts as "paid as agreed".

I completely support this post. In Riverside bankruptcy is like something that people do because they have debt that they want to get rid of. It is such a bigger deal than people seem to think. Everyone has a story of their uncle who had a friend who filed for bankruptcy and then a year later they were running a successful debt-free business (BOGUS!!!) Think carefully before you file for bankruptcy. Very carefully. What I would like to know is when is a good time to file for bankruptcy?

When you're facing immense financial crisis and have tried out debt relief options in order to get rid of your debt and have been unsuccessful, then you may think of filing bankruptcy. However, it's better to not file bankruptcy on your own. You should always consult a bankruptcy attorney and then decide which chapter of bankruptcy filing will be best suited for you.