Every state is different when it comes down to filing for bankruptcy.  Since there are so many factors that you’re going to have to dig into, I thought I would write up this post to help you better understand the situation and how much you’re going to have to set aside.

No, you’re not going to be able to declare bankruptcy for free, or include the bankruptcy fees into your filling, because no one is going to work for you.  This is why its important that you save up a little extra cash in order to afford your attorney.

Taking a look at bankruptcy costs

To file in a local courthouse, you’re going to have to more than likely pay around $300 to file for either Chapter 7 or Chapter 13.  You can always refer to the court system to see what the exact pricing is, but usually it will be around $300.

Paying for your attorney

You will need an attorney 99% of the time.  If you think you can get away without having one, you’re wrong, because there are so many forms to fill out, as well as procedures to take.

All attorneys are going to be different in pricing.  You will find that some will allow you to pay in installments, while others will want a full payment up front to avoid being stiffed in the future.

You will want to price a few attorneys in your area, but plan on paying upwards of $2,500 for an attorney in your area.  If you really want to get your money worth, I would recommend going with an experience firm.  A younger lawyer may get the job done, but they can screw up as well.

In the end, if you save more than $3,000, you will be on the safe side.   I would say that you could pay as little as $600 with a cheaper attorney, but with someone that is experienced, as well as throw in filing fees, plan on paying around $2,500.

A common question asked among those filing Chapter 7, as well as Chapter 13 is the following…

Can I Keep My House if I File Bankruptcy?

The first thing that you will need to look at is the equity in the home.  If there is no equity in the home, you will more than likely be able to keep the house.  After you declare bankruptcy, you will be responsible for all bills associated with the home such as liens, deeds, and more.   As long as you continue to make payments, you will be able to keep it.

While the answer can be tricky with this question, you may lose your home to the bank if you fail to make payments.  If you show up at the courthouse declaring bankruptcy and the judge realizes you’re not making payments, they probably won’t side with you.  If you’re making an attempt to make the payments, they may be on your side.

Every state varies

While I’m no bankruptcy attorney, I would recommend that you consult with one, because they are going to be able to tell you the exact rules in regards to your bankruptcy.

As long as the equity in your home is exempt, you’re more than likely going to be able to keep your home.  This is if you’re up to date on your payments and not behind at all.

If you’re up to date on your payments, all signs will more than likely point to yes, but that doesn’t mean its true 99% of the time.  Again, consult with a bankruptcy attorney in your area to ensure that you’re on the right path and to also get some legal advice that works for your situation.

If you’re thinking about declaring bankruptcy, or you just want to know which each chapter is all about, I wanted to give you some pointers on what each bankruptcy does for you and how you can file.

Now, before you set out and file, you’re going to want to make sure that you really need to.  There are a lot of people out there that think they need to, but they come to find out that with a little hard work and motivation, they can pay off their bills relatively fast.

Chapter 7 Bankruptcy

Let’s start out with this first since it is the most common out of the two.  With Chapter 7, you will either have all of your debts discharged, or it may be partially.   The judge may force you to sell your assets to repay some of your older debts.

Once you declare Chapter 7, all of your older debt collectors may not contact you after the process has been done.  There are debts such as student loans and more that will never go away, so be sure to ask about these when consulting with an attorney.

How do I file?

You will find that the court system will make you take a means test first.  This test is going to show the judge that you really do qualify for filing.  If you don’t pass this test, they may reference you to Chapter 13.  If you pass, you will have to work with an approved counseling agency.

Chapter 13 Bankruptcy

This one is a little bit different than Chapter 7.  Under this process, you will have to repay all or even parts of your debts over a certain time period.  You and the courts will have to work out some sort of repayment plan.  You will pay the courts once approved and from there, they will pay your creditors.

The creditors are still going to get your money, but the judge is going to have the final say on what they are going to get.  When filing for Chapter 13, you will owe a lot less than you would before, but you will still have to pay over time to what the judge deems fair.

These are the 2 most common types.  If you find yourself in some financial trouble, be sure to meet with a bankruptcy attorney.  What you’re going to find is that they will be able to guide you on what’s best for you.

When it comes down to fighting debt, I’m an advocate of a company that is going to help you, rather than be in it for the money.  Sadly, there are a lot of companies out there that are going to take your money and run.  In return, you’re going to be stuck with more money, as well as a bigger headache.

Going on the hunt for a non profit credit counseling service isn’t the hardest thing in the world, but I wanted to give you some pointers that you can use, if you don’t want to use the services on my list listed below.

How to find the best company

Call them up: I know it can be hard to meet with some companies face to face, but there are a lot of great ones online that you can use.  Any company that has contact information tends be legit.  If you’re finding that the company only has an email address, you may be in trouble if you have to ask a lot of questions.

How do they work? If they are going to ask for money up front, you may have to think things over.  A solid company is going to allow you to meet with a counselor first, where you can explain your needs.  While I understand that some companies have smaller fees, you will want to make sure that you’re not paying more than $100 for a set up fee.

What is the best way to start?

The best way to find a counselor in your area would be to start with the NFCC.org.  You will just have to give them your zip code and they will help you find a company that will work for you.  You can either meet with someone in person, or if you wish to remain anonymous, you can talk over the phone, or online.  It’s really your own personal preference.

Some cool stats to look at…

Every year, more and more people get counseling to help them with their debt.  Last year alone, over 3 million people signed up.  Out of those 3 million people, over 30% were able to get the help that they need.  On the other hand, around 40% dropped out for various reasons.

If you have debt problems, don’t be afraid to get professional help.  There are a lot of companies out there that are more than willing to help without taking away your money.  It’s your duty to do your homework, have motivation, and become debt free!

On occasions, I get an email here and there asking about a debt consolidation service, or another type of service that deals with debt.  While our website doesn’t deal with people in debt, we just offer advice, as well as secured credit cards to help people get back on their feet.

With these emails, this got me to thinking about writing reviews about companies that I have researched online.  Our first culprit on stage is Freedom Debt Management.  While I haven’t used the service personally, I gathered up a ton of information on the Internet to give you a good idea on what they are all about.

They are a non-profit

For starters, these are the companies that you want to work with, if any.  What you’re going to find is that the non-profits are really in it for you, rather than their pocketbook.  While this doesn’t meant that they are going to do a good job, you’re better off testing with these companies, rather than those that advertise at 2 in the morning on your local cable channel.

They have an A+ BBB rating

The number one thing that I advise people on checking when dealing with a company is to check the BBB rating.  If it is anything under a B, you’re probably going to want to check with another company.  I went ahead and looked into their BBB rating and they have the best rating you can get, which is an A+.  This alone, gave me the  confidence that they are a good company.

They are a debt consolidation care member

Debt consolidation care in my opinion is probably one of the most known, well respected debt consolidation sites on the Internet.  They give it to you straight and let you know who’s going to work with you, as well as who isn’t.  They also recognized the fact that they are an A+ BBB company, as well as have fantastic remarks online.

Overall, from reading what I have seen online, I have found that you have nothing to worry about.  When I recommend a place, I always check to see if they are non-profit, as well as if they are rated with the BBB.  As every company will have some sort of negative review, you’re going to find that you can feel rather comfortable with trying a company like this out.