The new bankruptcy law called "The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005" makes the process much more complex which makes it much more difficult for filers to make it a do-it-yourself project.

If you fail to comply with any of the vast paperwork requirements, your bankruptcy can be dismissed by the bankruptcy court and that's a bad thing.

When you file your bankruptcy forms with the bankruptcy court, a stay is issued which stops your creditors from calling you, harassing you, suing you in court,  repossessing your possessions, foreclosing on your home, they can't contact you by mail, they can't garnishee your wages or take any other kind of collection action.

No doubt this stay will come as very welcome relief. Screw up the paperwork and the stay goes away with one stroke of the bankruptcy court's gavel! This means your creditors can once again come at you from all sides. Release the hounds!

Make an even larger blunder on the forms and you might even find yourself being prosecuted for serious crimes - which could land you in jail with a serious sentence. This is no time for silly games. It's time to get very serious.

There's also the issue of keeping any property you might cherish. If you try to save a few bucks by doing it all yourself there's a greater chance that you'll not know of some exemption that you might have used to save your car or worse your home. Only an attorney can make sure you get every advantage the law allows.

Bankruptcy Costs

There are a number of fees that you'll have to pay in order to get your bankruptcy pushed through the court system. First are filing fees. Then you'll have to pay for those stupid courses you'll have to take to qualify to file. Then there's the issue of potentially losing some of your assets - not a small matter.

The two courses usually cost somewhere around $100-150 depending on where in the country you live. On average a chapter 7 bankruptcy filing fee will run you somewhere around $300-350 with the filing fee for a chapter 13 bankruptcy being a bit less. These sums are subject to change so you'll have to check to get the current figures.

If you truly cannot come up with the required fees, your attorney may be able to obtain some relief. In some states an extended payment plan where filers can take four months to come up with the fees is common.

Bankruptcy Time Limits

If you file a chapter 7 bankruptcy, you can't file another for eight years. Also the report of your bankruptcy filing will poison your credit file for ten long years which is a real concern if you're middle aged or older.
 

Back