Bankruptcy is a toughest decision to make. But sometimes people go with this option due to unexpected expenses. Usually, people adopt this option when they are not able to pay back the money to creditors. Good bankruptcy information is difficult to find. Anyone can file for it such as individual, company, and organization. As per experts, it is a fruit which should be eaten properly and carefully. It could be a most important decision of your life, so do consult properly before filing it. If individual fails to pay the debts through debt consolidation, then he/she can file for it.

Bankruptcy can be divided into three parts or chapters, Chapter 7, chapter 13 and chapter 11.

Chapter 7 is the best option for those debtors whose income is below the median of debts and got unsecured debts. All unsecured debts like credit cards, unsecured loans, medical bills, education fees etc.

Chapter 13, this bankruptcy plan is applicable only those debtors who are earning sufficient funds from job. Courts create a payment plan for debtor where he/she has to pay a particular amount to court every month for terms of 3-5 years.

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The main factor that decides the cost for filing for chapter 13 bankruptcy is the complexity of individual’s financial situation. Apart from the court fees it’s very difficult to calculate the total cost as it will mainly depend on attorney’s fees.

However, to consider the total cost one has to calculate, there are basically two types of cost that one has to incur in filing for bankruptcy.

1.The fees for filing for bankruptcy: the cost to file for bankruptcy is not very high. At present, the filing fee is about $274. This covers all the administrative as well as filing fees that are used in chapter 13 proceedings.

2.The fees to be paid to attorney: this is the main fee to be considered by a debtor while filing for the chapter 13 bankruptcies. Mainly you will find the attorneys charge on per-hour basis, the hourly rate will depend on rate prevailing in your state or area and your power to negotiate. The attorneys who take up bankruptcy cases generally charge an upfront fee that is called as retainer. They charge this to begin the case. These retainer ranges from five hundred dollar to a thousand dollar sometimes higher depending on the individual economic status and his power to negotiate.

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Those who are faced with a fear of overgrowing debts, and wishes to file for bankruptcy might not have a clue about the recourse to the problem. The first course of action is to file a bankruptcy paper in the bankruptcy court.
-How Can You File Bankruptcy?
Filing for bankruptcy is a legal process and for this reason, and for the financial wellbeing, decisions taken in this regard should be weighed with pros and cons. The individual should decide whether professional assistance is needed or he can go on his own. Though it is possible to file for bankruptcy in the individual capacity, it requires high level of mental tolerance.
-How to decide you should file under Chapter 7 or Chapter 13?
In case of filing the bankruptcy on your own, the decision regarding the choice of filing of bankruptcy i.e., either under Chapter 7 or Chapter 13 is to be taken judiciously. In the circumstances, it is wise enough to consult few people who are knowledgeable about filing of bankruptcy cases.

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When you are struggling to make your credit card payments, mortgage, car payment, or other outstanding bills, you may find yourself deep in debt. At a certain point it may feel that you are so far behind that you are never going to catch up. Fortunately, United States law offers provisions to debtors who are under severe financial stress to help them secure a fresh start. While bankruptcy has its downsides, it can be a much better alternative to being burdened with a large pile of debt for the rest of your life. Individuals who are looking to file for bankruptcy have multiple bankruptcy options available, each of which is ideal for different people in different situations. One bankruptcy option that is available to an individual with a high amount of personal debt is Chapter 13 Bankruptcy. Under Chapter 13, an individual clears his or her debts by drafting a plan to save money and pay back the debts over 3 to 5 years. This gives the debtor a large grace period to reevaluate finances and gradually work towards becoming debt free. For some people, this form of bankruptcy is a much preferred method over Chapter 7, which requires a debtor to liquidate, or sell, much of his or her property to pay back debts. With Chapter 13, you will liquidate little to no property and will pay back debts using income that you earn over time. Eligibility: Debt Limits In order to file for Chapter 13, you must meet certain strict debt limits. Anyone with debts over the amounts listed below will not be eligible for Chapter 13 and must file for Chapter 7 instead. The restrictions on debt are divided into secured and unsecured debt as follows: Must have less than $336,900 in unsecured debts Must have less than $1,010,650 in secured debts Must be an individual debtor. No partnerships or corporations are eligible for Chapter 13.

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Many people are surprised to learn that there are a number of different types of bankruptcy. The two that apply specifically to individuals are Chapter 7 and Chapter 13 bankruptcy. What exactly is the difference between them?

If you’re considering filing bankruptcy because you are overwhelmed with an increasing debt load, you’ll need to understand the difference between these two processes. Chapter 13 does not do away with your debt the way that Chapter 7 does. Instead, you are asked to create a payment plan over the next three to five years in which you will make regular payments to creditors. Even so, you usually don’t end up paying the total amount that you owe.

Nevertheless, you will not have your debts wiped out as you may expect when you hear the term bankruptcy. There are some advantages, such as not having to participate in liquidation. In a straight bankruptcy (Chapter 7), you are forced to liquidate assets in order to help pay for your debts. In practice this may not matter much, because most people declaring bankruptcy don’t have much to sell anyway. If they own a house and some modest possessions like furnishings, these are usually protected by state and federal bankruptcy protection laws anyway.

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The goal of Chapter 13 bankruptcy is to help you create a payment plan so that you can pay off part or all of your debt during the next three to five years. But how do you determine whether you have to pay a creditor in full instead of settling for pennies on the dollar during a Chapter 13 bankruptcy plan. Well, that largely depends on the kind of debt that we’re talking about.

There are some kinds of financial obligations labeled as priority claims. These kinds of debts must be paid off completely during the repayment plan. Some types of priority claims include child support obligation and back taxes. If you have these kinds of financial concerns, then you will need to create a payment plan in which you pay off these priority claims completely. If you are not able to do so, you may not qualify for Chapter 13.

What are some other eligibility requirements for Chapter 13? Well, for one thing, there is a maximum amount of debt. To qualify for Chapter 13, you should not owe more than $922,975 in secured debts. You should also not have more than $307,675 in unsecured debt. If you’re wondering about the difference between secured debts and unsecured debts, it’s actually pretty simple. A secured debt means that there is an asset that can be repossessed such as your car or your house. Unsecured debts, such as credit cards, are not backed up by any collateral.

Your eligibility for this kind of bankruptcy and the exact terms that you are given also depend on your recent filing history. If you have filed with a bankruptcy court for any kind of relief during the last few years, this may change your situation considerably. If you were given a discharge recently, you’ll be treated differently. How so? Well, assuming you qualify for another discharge to begin with, you’ll probably have to pay off all of your debt to the creditors during a repayment plan instead of simply settling for a fraction of the cost.

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The goal of Chapter 13 bankruptcy is to help you create a payment plan so that you can pay off part or all of your debt during the next three to five years. But how do you determine whether you have to pay a creditor in full instead of settling for pennies on the dollar during a Chapter 13 bankruptcy plan. Well, that largely depends on the kind of debt that we’re talking about.

There are some kinds of financial obligations labeled as priority claims. These kinds of debts must be paid off completely during the repayment plan. Some types of priority claims include child support obligation and back taxes. If you have these kinds of financial concerns, then you will need to create a payment plan in which you pay off these priority claims completely. If you are not able to do so, you may not qualify for Chapter 13.

What are some other eligibility requirements for Chapter 13? Well, for one thing, there is a maximum amount of debt. To qualify for Chapter 13, you should not owe more than $922,975 in secured debts. You should also not have more than $307,675 in unsecured debt. If you’re wondering about the difference between secured debts and unsecured debts, it’s actually pretty simple. A secured debt means that there is an asset that can be repossessed such as your car or your house. Unsecured debts, such as credit cards, are not backed up by any collateral.

Your eligibility for this kind of bankruptcy and the exact terms that you are given also depend on your recent filing history. If you have filed with a bankruptcy court for any kind of relief during the last few years, this may change your situation considerably. If you were given a discharge recently, you’ll be treated differently. How so? Well, assuming you qualify for another discharge to begin with, you’ll probably have to pay off all of your debt to the creditors during a repayment plan instead of simply settling for a fraction of the cost.

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When a person or a business needs to file for bankruptcy protection, there are several chapters within the United States Bankruptcy Code under which the initial petition can be filed that will govern the subsequent proceedings.  While many people understand the basics for bankruptcy petitions that are more consumer-oriented and usually filed under Chapter 7 or Chapter 13, many see filings under Chapter 11 of the code as extremely complicated and difficult to understand.

While a bankruptcy filing under Chapter 11 is usually a complicated matter, there are some basics that are not difficult to understand.  However, this is not a filing that one should attempt to take on individually.  You will need professional help in order to make sure that all goes as it should, so contact a bankruptcy lawyer today to schedule an initial consultation if you are having trouble meeting your obligations.

Basic Procedure under Chapter 11

Generally, a Chapter 11 filing is done by businesses, and this sort of filing is known as either a ‘reorganization bankruptcy’ or a ‘rehabilitation bankruptcy.’  The reason for these labels is that a Chapter 11 filing basically gives the petitioner time to put together a plan that helps it get out from under the debts it cannot pay at the time of the filing and to one day ‘emerge’ from bankruptcy.

Below is a brief look at the procedures involved with a Chapter 11 filing:

1. Initial filing – When a business files for Chapter 11 protection, the court will order that the creditors cease with collection efforts while the case is pending, much like in a consumer bankruptcy filing.
2. Disclosure statement – The filing party must also file a disclosure statement that lists all assets and liabilities as well as a plan for reorganization that details how the debts will be paid during the plan’s duration.
3. Creditors’ committee – When a filing occurs, the largest creditors are usually grouped into a committee that will vote on the reorganization plan.  If the plan is approved, the parties move forward under it.  If it’s not, either the filing party must come up with a new plan, the creditors can come up with their own plan or the filing party can petition the court to ‘cram down’ their plan if it’s reasonable on its face, and the court will rule on it.
4. Post-plan – When the court ultimately accepts a plan, the debts as constituted prior to the filing are discharged and the petitioner must make the payments proposed in the plan until the time has passed.  If the company does not pay under the plan, it opens up several possibilities for enforcement.

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What are the different types of bankruptcy that apply to individuals? There are two, Chapter 7 and Chapter 13. You may have heard of Chapter 11 but that is for businesses not individuals.

Effective October 2005, Congress made sweeping changes to the bankruptcy laws that gave consumers more incentive to seek bankruptcy relief under Chapter 13 rather than Chapter 7. Chapter 13 allows people with a steady income to keep property, like a mortgaged house or a car, that they might otherwise lose through the Chapter 7 bankruptcy process. 
Basically in Chapter 13, the court can approve a payment plan that can run up to five years. This process lets you pay off today’s debts with future earnings. Obviously you have to have a steady source of income to qualify for this filing.

Chapter 7 is known as straight bankruptcy, and involves liquidation of all assets that are not exempt. Exempt property may include automobiles, work-related tools, and basic household furnishings. Other property could be sold by a court appointed trustee or given directly to a creditor as payment of your debt. There is also a limitation of how much you can earn during this process. It is not designed for you to profit by not having to pay your debts.

Another difference between the two is the amount of time that must pass before you can refile. With Chapter 7 the waiting period is 8 years. With 13 it is two years.

Both types of bankruptcy can get rid of unsecured debts and stop foreclosures, repossessions, garnishments and debt collection activities. Both can provide exemptions that allow people to keep certain assets, although exemption amounts will vary by state. Obligations that cannot be satisfied by either form of bankruptcy include child support, alimony, fines, certain taxes and student loan obligations both government and privately funded.

Unless you have an acceptable plan to satisfy your debt under Chapter 13, the court usually will not allow you to keep property when the creditor has security lien on it. This could include your home as well as well as boats, vacation homes, recreational vehicles etc.

As part of the new law, persons seeking to file under either chapter have to have attended a government approved credit counseling course within six months of filing. The idea here is to try and solve the credit problem without taking legal action. The second major change just involves Chapter 7. Today you have to satisfy a “means test” to confirm your income does not exceed a certain amount. This amount will vary by state. You can find those limits here.

Bankruptcy is an emotional time but a necessary step for those who absolutely need the relief.

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Our economy is built upon consuming goods and services. We are often encouraged to purchase with credit that for which we cannot afford to pay for with cash. If, because of sickness, a job layoff, or just poor economic and estate planning, you no longer can afford to pay off your consumer debt, you might consider hiring an attorney in order to file for Chapter 7 Bankruptcy in order to obtain a fresh start for your personal finances. In a time when billion-dollar financial bailouts are being extended to prominent banking institutions, giant insurance carriers and well established automobile makers, you deserve to obtain your own personal financial relief.

In order to qualify for a Chapter 7 Bankruptcy, a debtor must meet certain eligibility requirements. First, a debtor may file for Chapter 7 Bankruptcy only once every eight years. Second, the debtor must pass the “Means Test” prior to qualifying for a Chapter 7 filing. As a general rule, the debtor’s average monthly income during the six months period preceding the filing should not be higher than California’s median income. If the debtor’s average income is more than the median, he may not be able to file for Chapter 7 Bankruptcy if his disposable income would allow him to pay off his creditors a certain sum of money over a fixed period of time.

Chapter 7 Bankruptcy takes about three months to complete. Prior to petitioning for Bankruptcy, many candidates will consult an attorney and most filers will be required to consult a nonprofit credit counseling agency. The reasoning behind credit counseling is to figure out whether you can utilize other options for debt management. Once credit counseling is complete, your attorney will file the Voluntary Petition with the court requesting a discharge of debts. After this Petition is filed with the court, the court enters an Order for Relief, commonly known as, the Automatic Stay, which obligates all creditors and collection agencies to stop all collection efforts. This means that most creditors must immediately stop any forms of harassment, terminate their demands for repayment of debt, and halt their threats of pursuing legal action against the debtor.

Filing for chapter 7 bankruptcy also means that the debtor is placing all his debts and assets, including those assets held in living trust, in the hands of the bankruptcy estate. The bankruptcy court controls these debts and assets by assigning a trustee to manage each chapter 7 bankruptcy case. The trustee’s role is to obtain money from the debtor’s Bankruptcy estate for the benefit of unsecured creditors. However, in most cases, the trustee cannot touch the property which is considered exempt. Exempt property is the property a debtor can retain during and subsequent to Bankruptcy. Your attorney will be able to determine in advance what assets are likely to be exempt.

California has created its own individual exemption system. There are two different sets of state exemptions which California uses in the Bankruptcy process. These are the standard California exemptions and the alternative California exemptions. The later, with a few important deviations, are quite similar to the federal exemptions, which for the most part are not available for use in California. A debtor filing for Bankruptcy in California must satisfy the two year residency requirement in order to use California’s exemption system. Generally speaking, a debtor can exempt both real and personal property owned by him, although most exemptions have a cap amount which is continuously updated by the California Judicial Council. One of the most important exemptions offered is the homestead exemption which allows a debtor to retain the equity he amassed in his home. Preparation of a California homestead exemption by a qualified estate planning attorney allows a debtor to retain between $50,000.00 and $150,000.00 worth of equity in his primary residence when declaring a chapter 7 Bankruptcy. In today’s California real estate market, property values are fast declining. This means that many debtors who were effectively precluded from filing for Chapter 7 Bankruptcy during the housing bubble, due to significant equity in their homes, are now free to discharge their debts in Chapter 7 Bankruptcy, and retain their homes.

When filing for Chapter 7 Bankruptcy, a debtor must choose either the standard or the alternative set of the California’s State exemptions, and cannot pick and choose between exemptions contained in both systems. Your bankruptcy attorney will point out that in many cases even if the debtor has property that is worth more than the exemption amount allows, the bankruptcy trustee may still not want to deal with that property, if the trustee sees that little money can be recovered from taking the asset. In such a case, the trustee is likely to abandon the property, and the debtor will be able to retain it. For the most part, such abandoned nonexempt property can be retained by the debtor through redemption, which simply means offering the creditor a lump sum payment equal to the property’s current replacement value. Redemption eliminates all liens on the property. Another alternative available to the debtor is to reaffirm the debt and keep paying for the property. When a debtor reaffirms a debt, both the creditor’s lien on the property and the debtor’s personal liability under the reaffirmation agreement survive Bankruptcy.

Finally, it is important to note that in some instances a debtor may be able to eliminate or reduce certain liens attached to his exempt property. This procedure is known as lien avoidance. How much of a lien can be eliminated depends on the value of the property and the amount of the available exemption. However, not all liens can be wiped out. For instance, the remedy of lien avoidance cannot be used for home equity loans or second mortgages if a debtor files for Chapter 7 Bankruptcy, but might be available if he files for Chapter 13 Bankruptcy, and strips off his second mortgage, treating it as an unsecured debt in the Chapter 13 plan. It is always best to consult with an experienced Bankruptcy attorney prior to filing for Bankruptcy, so that you can get a better understanding of your legal rights and options.

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