Private Bankruptcy Filing

It is not not only companies and firms that will file for bankruptcy. An individual can also file for one if he is encumbered with obligations and can no longer pay his creditors due to unemployment, medical expenses, or other unexpected expenses. Filing for bankruptcy can be the answer to relieve an individual from eligible liabilities and to give him a fresh start to control his finances better.

Options for filing

One has the choice to file for a Chapter 7 or a Chapter thirteen bankruptcy. A chapter 7 bankruptcy enables one to pay down his creditors by the liquidating all the non-exempt assets like cars, real estates, boats, and the like. This will be done by the bankruptcy trustee who will then distribute the converted money the creditors. This can discharge the debtor from all eligible obligations. A chapter thirteen bankruptcy, on the other hand, permits one to propose a payment scheme of three to 5 years to pay all his debts.

Hiring a lawyer

Although it is not positively critical to hire a barrister when filing for bankruptcy, it remains strongly recommended. Bankruptcy laws can be complicated and firms frequently tell you to seek legal advice. Lawyer’s fees can range from $1,600 to $2,000 so go forward and hire one if you can afford to.

Fees

A Chapter seven generally costs around $274 while a Chapter thirteen typically costs $189 to file. Aside from these, there are still other court fees to pay like appeal costs and requests for certification among others. Rates are likely to change from state to state.

Although the debtor can be relieved of his obligations when filing for bankruptcy, it is not without a disadvantage. The move will reflect on his credit report and it will make it hard for him for him to get credit.
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