Bankruptcy?

Question

My mom and my fiance need the cheapest way to file bankruptcy. They both qualify (done consults with lawyer who quoted them at almost $2,000 to file). I can use all the help I can. Info on how to get what can be filed against, how to file (by lawyer CHEAP/FREE or doing it yourself), how to get the account info on everything that needs to be filed against (FREE PLEASE). My mom is without a job currently (looking for a new job) and my fiance and I struggle paycheck to paycheck with our baby girl. We need something that is going to get them out from underneath a WHOLE LOT of debt the quickest. We have no money.

THanks,
Belinda

My fiance (not sure on my mom) cannot do ANYTHING to pay back ANY of his debt! It is over $30,000 (at least).

Also I see one answer say that "you WILL lose everything" well it is hard to lose everything if they have NOTHING! All he has in his name is a car (not worth anything according to Blue Book Kelly) and a bank account with NO MONEY in it anyway. His ex wife get 55% of his paycheck for current and back child support. I don't know what is going on with my mom, I don't ask anymore. But I know how it is with my fiance, we don't make any money and we don't have any money. He doesn't own anything of value!

Answer 1

First of all, if you are going to file, chapter 7 is the only way to get a fresh start and you can rebuild your credit quickly.

There are many attorneys available who will charge less than a $1000 for a bankruptcy. Bankruptcy is easy money for lawyers. I filed bankruptcy for $550, including filing fees. I used a legal aid office.

You can file yourself and maybe I could help you with that since I've been through the entire process twice. Remember, when you decide to file, ignore all bills that need to be paid and apply that money toward getting your bankruptcy completed. Look for a legal aid office in your state to assist you. Their services usually cost around $300.

Gather up all the creditors you have, account numbers, addresses, balances, etc. Let me know what state you are in.

Filing Procedures under the New Bankruptcy Code
(Effective October 17, 2005)


Major Intent of Bankruptcy Reform:
The major intent of bankruptcy reform is to require people, who can afford to make some payments towards their debt, to make these payments, while still affording them the right to have the rest of their debt erased. These people must file Chapter 13.

Status of the Bills:
The Senate passed the Bill on March 11, 2005 and the Congress on April 14, 2005.

When will this be Law:
The bill was signed into law by the president on April 20, 2005.

Sections 308, 322 and 330, all concerning the homestead exemption, take effect immediately.

This is law now: The exemption is limited to $125,000 if the property was acquired within the previous 1215 day (3.3 years). The cap is not applicable to any interest transferred from a debtor's previous principal residence (which was acquired prior to the beginning of such 1215-day period)

The rest of the provisions of the law will come into effect 180 days after the Bill is signed or on October 17, 2005.

Major Changes:

Means Test:
This will identify debtors who have the financial capacity to pay some money to their creditors. The test will work as follows:

TEST # 1:
Is the family earning above the median income for their state?
You can check to see if your income is above the median income for your state. State Median Incomes
If the answer is "No" Chapter 7 can be filed!

TEST # 2:
If the answer is "Yes" to TEST # 1 , do you have excess monthly income of more than $166.66/month to pay $10,000 of debt over 5 years?
If the answer is "No" you must answer another question, if "Yes" Chapter 7 cannot be filed but Chapter 13 may be filed!

TEST # 3:
If the answer is "No" to TEST # 2 do you have excess income of greater than $100/month to pay over the next 60 months at least 25% of your unsecured debt?
If the answer is "No" you can file Chapter 7, if "Yes" chapter 7 cannot be filed but Chapter 13 may be filed!

Proof of Income:
Debtors filing Chapter 7 or Chapter 13 bankruptcy, must provide to the trustee, at least seven days prior to the 341 meeting, a copy of a tax return or transcript of a tax return, for the period for which the return was most recently due.

State Exemptions:
You cannot use the exemptions in your state of residence unless you have lived there at least 2 years.

Homesteads:
This goes into effect as soon as the bill is signed by the president! The exemption is limited to $125,000 if the property was acquired within the previous 1215 day (3.3 years). The cap is not applicable to any interest transferred from a debtor's previous principal residence (which was acquired prior to the beginning of such 1215-day period)

Counseling:
You must have finished counseling within the last 6 months before you can file.

Child Support and Alimony:
These debts would go from a priority of 7th to 1st.

Tithing:
Up to 15% of your income can be given to charity. This is seen by some as a loophole allowing people who may be just over the thresh hold of having to file Chapter 13 to drop down low enough to file Chapter 7.


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In short, the new laws only effect 3% of the population. Look at the numbers and see where you fit in. Contact me at [e-mail].

Answer 2

have you guys interviewed a para legal, they are not as expensive as an attorney. Some are even more than 2/3 less than what an attorney would charge and they are pretty competent.

If you get into debt counseling that is almost like being in bankruptcy, because a lot of lenders look at that services that way.

You can file the bankruptcy yourself, however, some judges have little patient with those that file themselves. If you get a supportive judge not a problem, but his/her attitude could be a downer. You only have to pay the cost of filing the bankruptcy. There are two a chapter 7 that eliminate all debts or a chapter13
where you are placed on a plan to pay your debts and you are given a court trustee to assist you. You make out a monthly check to the trustee and he will ensure that the debts get paid.

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 3

Don't you just love answers like dmb's? It's the standard "pay your bills" reply that most collection agents post here. So you just run on out to the ol' money tree and harvest them a payment!!!

STUPID!

While the othere responders seem to encourage you to file without an attorney, I do not recommend it.

Even attorneys are having a difficult time with the new laws. I know of someone who filed last year, and due to a dumb error on the attorney, they have to dismiss the bankruptcy and file all over again...under the new laws. One year of bankruptcy payments and time down the draim, all due to one small error.

And this guys is an experienced bankruptcy expert. What do you think someone with no bankruptcy experience will do? With all of the new reporting information needed, you are really taking a risk.

The law does have some help...it allows low income people to get a break on the legal fees. I'm surprised that the lawyer didn't explain that to you.

Check around and see if any local attorneys can help you out.

Answer 4

My recommendation is to go to the public library if possible and check out any books on HOW TO FILE.

It can be done without a lawyer.

Things have changed recently regarding bankruptcy, so make sure you have everything in line.

There are only court costs to file and perhaps a little bit for you to get your credit reports so you'll know what all debts you have.

Peace to you!

Answer 5

Look, the lawyers want you to file bankruptcy... Thats how they make their money!

The Credit companies want you to goto a Credit Counsel.... Thats how the get their money back!

If they ever want to purchase anything on credit in the next two decades, you will talk them into going thru a credit counsel.
The bankruptcy courts have changed alot of the laws in the last two years... You will, I repeat... WILL loose just about everything!

They charged it! Now its time to pay for it!

Answer 6

Okay...I was just in the same position. I needed to file BK but had no money. I got enough for the filing fees. I did everything myself. I went to the bankruptcy web site for my state and got all the forms. I printed everything out and typed it on a type writer. I took it to the court and made sure everything was correct and then filed it. Months later....my BK was COMPLETE!

Answer 7

If you are struggling financially, the best solution is to file bankruptcy but before declaring bankruptcy, eliminate your debt. Just look for an experts for a counseling.

Answer 8

You can file Pro Se - it is very straight forward....however....they must complete a finance/debt course that has been approved by the Trustee..BEFORE they file any documents w/ the court....

Then you must find out the "median" wage in your state....If their individual income (cuz they're not married) is below that then they can file CHAP7---otherwise they will be forced to CHAP13 and that is a five year plan.......You do not need an attorney....
but it takes effort to do it correctly

Answer 9

Chapter 13 bankruptcy will sometimes allow the attorney fees and court fees to be included in the repayment plan.

Answer 10

does either one of them own a house, send me an instant message