Filing Chapter 7 Bankruptcy
Filing Chapter 7 Bankruptcy : The costs in a chapter 7 case have traditionally been charged at $hibited by attorneys and even in small fee cases they are usually also “in fees”. There are many expenses that can not be discharged in a chapter 7 such as mortgages, alimony, child support and many others.
Typically a chapter 7 debtor has to spend $2,000-$3,000 to qualify to file a case. As there are many bankruptcy cases that can qualify under the means test criteria have been developed to help debtors qualify and in many cases there is no alternative but to file a chapter 7 to wipe out many of the debts and assets of the debtor. Most increased qualification stipulations have been developed when the bankruptcy law changed in 2005 when the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005” (BAPCPA) became effective and most filers will qualify under the previous rules.
The $2,000-$3,000 cost isactory FeasibilityTaxes, Court Filing Fee, Public Access to Court Records, Equity in your Property, Legal Passes and contained in Localerequires (1-800- floats) – these expenses may be “excluded from discharge” in section 727(a)(2)(A)(iii) of the bankruptcy code. As generally stated the following qualifications apply:
· Income taxes that were unpaid at the time of filing, tax return or tax return preparation and incurred within 1 year of filing that has been corrected within one year of filing. For example, if tax return was prepared and filed prior to 2005 that is “re corrections” can be conducted from 2005 to your bankruptcy case, then any income tax will not be dischargeable.
· Bankruptcy-related court-mandated repayment arrangements of a non-dischargeable lien. This typically will not apply to Chapter 7 cases filed in the 12 month period prior to filing for example intervenor repayment.
· Debts owed to foreign creditors and obligations to the U.S. respects foreign creditors’ laws (including whether or not they are dischargeable).
· Credit harassment or Equal Credit Opportunity Act (ECOA) claims including collection agency actions, active lawsuits, judgments, and any claims of liability under statutes acceptable in federal or equity court.
Debtors should carefully research their case and call a bankruptcy attorney to determine if a chapter 7 may be the best option. Most attorneys will provide the debtor with a free consultation of their fee schedule and legal counsel will charge an additional fee based on the circumstances of the case.
More importantly, the debtor would go through credit counseling, budgeting and money management lessons from a qualified non-profit credit counseling agency. In 2005 Congress reformed the Bankruptcy Code to make it more difficult to file Chapter 7, and in lieu the canned for Chapter 7 Filings the new law is more punitive, happens more quickly then other Chapters and requires the debtor to enroll in credit counseling as a condition of their bankruptcy discharges. It is probably not advisable for someone that cannot afford a higher priced attorney and choose not to file a Chapter 13 bankruptcy to get credit counseling. The debtor needs to weigh their options in this matter, as well as consulting with their bankruptcy attorney before making this important decision.