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Date: Fri, 18 Dec 2009 Time: 8:57 PM -
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Things To Consider Before Contacting A Los Angeles Bankruptcy Attorney
Article Source: DirectoryArticles.com
The idea of filing for bankruptcy can be scary and confusing. It is not a decision to enter into without the proper information. You may have seen an advertisement for a Los Angeles bankruptcy attorney on television or on a website, and the idea of paying a few lawyer fees and having your debt wiped out may seem like magic. But before you decide to file for bankruptcy, you should educate your self about the process, and gain an understanding of what bankruptcy actually means. Here are some things to consider when deciding whether bankruptcy is the right decision for you.
Types of Bankruptcy
The two types of bankruptcy that are of concern to individuals are Chapter 7 and Chapter 13, although there are several other chapters, such as Chapter 11 (used by businesses) and Chapter 12 (available to family farmers and fisherman).
Chapter 13 bankruptcy does not wipe out debt, but puts the debtor on a court-approved payment plan, allowing them to rehabilitate their financial situation under terms that the court believes are within their means.
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 Loans
Property Taxes
Income taxes less than 3 years old
Effect On Credit Score
The main disadvantage cited when cautioning individuals against bankruptcy of any chapter is that it stays on your credit report for up to ten years. Although this may deter some people, it is important to remember that if you are considering bankruptcy, your credit score is probably in pretty terrible shape as it is. If you think you can pay off your debts individually, or if they are close to falling off of your credit report, then the effect of bankruptcy on your credit score is something to take into serious consideration. However, if you are in a position where your credit score has no chance of improving in the next 10 years anyway, then this is not of much concern.
Bankruptcy Abuse Prevention and Consumer Protection Act
Put into effect in October 2005, this piece of legislation changed the terms surrounding bankruptcy. It implemented a means test, which determines whether a potential filer's income is low enough, compared with their debt and based on the calculation of a state-specific median income, to qualify for bankruptcy. It also mandates that anyone filing for bankruptcy must undergo a one-hour counseling session with a non-profit credit counseling agency, in which they discuss all options for dealing with the debt. They must provide written proof of this counseling session when filing.
Other Methods of Filing
Contacting bankruptcy lawyers is not the only option you have for filing. You may download the federal bankruptcy forms and fill them out yourself, although this option is not advisable unless you have an in-depth knowledge of bankruptcy laws. There is also bankruptcy software available, which works much like tax-prep software in that it guides you through the filing process. You can also use a full-service online preparer, although this person is not an attorney and cannot offer legal advice. They simply prepare the forms for you.
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.
Want the help of a Los Angeles Bankruptcy Attorney? Find out all of the different kinds of bankruptcy and how they'll effect you. Make sure you talk to bankruptcy lawyers soon and find out your options!
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