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Bankruptcy Attorney Jamie Ryke of the Second Start Bankruptcy Law Firm talks about the Truth about Bankruptcy. Find out how we can help you get out of debt and get a fresh start by filing either a chapter 7 or chapter 13 bankruptcy.

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The cost of filing bankruptcy has kept up with the economy and the demand for filing services, though it is not bankruptcy legal services alone that total up the cost of bankruptcy. There are a few other factors when considering bankruptcy, that the filer needs to think about before proceeding. To summarize the basic list of costs, they are legal fees, filing fees and counseling fees. Other fees like amendment fees would apply if you had to make changes to your petition after submitting it, or conversion fees if you decide to file chapter 7 bankruptcy after having submitted your petition for chapter 13.

Bankruptcy Legal Fees

Legal fees may be the bulk of bankruptcy costs, these fees can range anywhere from $400 to $1700 depending on where you are in the country. The cost of filing personal bankruptcy has in fact gone up in the last couple of years, mostly due to the changes in bankruptcy laws, that made it more difficult for individuals to qualify for a bankruptcy discharge while also requiring more paperwork to be filed by bankruptcy attorneys. Many attorneys and law firms understand that their clients are dealing with a lot of debt and may not be able to handle the legal fees all at once. So they have made it easier for filers to take advantage of payment plans.

Bankruptcy Filing Fees

When filing for bankruptcy it would be wise to hire an experienced bankruptcy attorney, as they would be best to calculate your total bankruptcy costs as they apply to the court’s fees. As of January 2007 the bankruptcy court filing fees are $299 for chapter 7 bankruptcy and $274 for chapter 13. There are other costs such as:

1. Registration of Judgment – $39
2. Notice of removal – $250

Conversion Fees

1. Chapter 11 to Chapter 7 – $15
2. Chapter 12 to Chapter 7 – $60
3. Chapter 13 to Chapter 7 – $25
4. Chapter 7 to Chapter 11 – $755
5. Chapter 12 to Chapter 11 – $800
6. Chapter 12 to Chapter 13 – $35
7. Chapter 13 to Chapter 11 – $765

Amendment Fees

1. Schedules D, E and F – $26
2. Amendment to list of creditors – $26

Counseling fees
The basic costs of filing for bankruptcy end with the counseling fees. These are the fees you must pay to receive the mandatory counseling that the new bankruptcy laws require all filers to take prior to getting a discharge. The costs of bankruptcy counseling are rather moderate. Visit the U.S. trustee’s site for a list of approved credit counseling agencies, this portal lists the agencies by state and typically the costs are anywhere between $20 to $40 dollars. The first part of the counseling should be done prior to submitting your bankruptcy petition and the second part prior to getting a discharge.

So the overall bankruptcy costs can certainly add up and make the process more complicated for you if you don’t have the disposable income to pay for it all at once. Your bankruptcy attorney’s fees may be negotiable, or at the very least they may allow you to make installments on their total fees. However the bankruptcy court’s fees will not be negotiable these must be paid in full at the time of filing.

As the economy continues to be the main cause of concern for most Americans, people are starting to consider bankruptcy as way to find relief from their overwhelming debts. The real estate crash and the high price of fuel are only part of the reason, while credit card and other unsecured debts have contributed heavily to the current burden of debt many people live with today and have a tough time keeping up with. So it begs the question, should you take advantage of a free bankruptcy evaluation?

If you’re in financial stress, there are several reason why you should consider taking a free evaluation with a bankruptcy attorney, and one of the most important ones is that you need to accurately find out right now where you stand financially. A bankruptcy consultation can clear a lot of doubts about the process. It is during this initial consultation that your attorney can run the bankruptcy means test for you, this is the determining factor in whether first of all you qualify to file for bankruptcy or not, once that’s determined further calculations of the means test can specifically tell you which bankruptcy chapter you’re eligible for.

Other things that can be revealed and may surprise you to find out during this consultation is that there are certain debts that can not be discharged under any bankruptcy chapter. These include tax arrears, child support payments, judgments against you and student loans to name a few. This is a very important reason to consult with a professional bankruptcy attorney, since most people can not make this determination on their own. If your case consists of mostly these kinds of debts then it’s possible that bankruptcy protection is not possible for you, instead you may consider debt consolidation under a different type of service.

Filing chapter 7 vs chapter 13

If have you considered bankruptcy but are not familiar with how it really works, you may be under the impression that by filing bankruptcy you’ll end all your financial troubles. Again, this is the reason why a bankruptcy evaluation with an experienced attorney is necessary. As mentioned above, during your evaluation you will find out which chapter best suits you after your attorney runs the means test on your case. This will depend on whether the bulk of your debt is secured or unsecured debt and whether you have the necessary disposable income.

There are very significant differences between chapter 7 vs chapter 13 bankruptcy, mostly in that in chapter 7 bankruptcy you get to discharge your unsecured debts and in chapter 13 you simply rearrange your debts into more manageable terms of repayment. Under chapter 13 your debts can be reduced and as long as the bankruptcy court and trustee accept your new terms of repayment then you will get a discharge once the debts are paid off.

All of this information will be better explained by a bankruptcy attorney in your area, you do not need to struggle with learning the bankruptcy code and attempting to apply the laws to your case on your own. Even if you do not end up filing with the help of a bankruptcy firm, you will get a lot of insight into the process by taking advantage of a free bankruptcy evaluation. Many law firms offer free evaluations and one on one consultations so take the time to find a reputable firm and bring your case to be evaluated you’ll gain a wealth of knowledge in the process.

To take advantage of a free bankruptcy evaluation now, visit our bankruptcy services evaluation review page and fill out a simple online evaluation form, you’ll then be contacted by a bankruptcy attorney in your area to get your process under way.

Exempt vs non-exempt assets

One of the most common doubts for bankruptcy filers is in determining what assets are exempt when filing bankruptcy, this is not always clear especially if there are versified assets involved. As always it is best to consult a bankruptcy attorney to determine this with precision, but this post should give you an idea.

Exempt assets are those that can not be included in the bankruptcy estate, for example your retirement account. 401K, IRA accounts and other retirement accounts are in most states exempt from liquidation, however some states do consider these types of assets non-exempt so it’s important that you check with your attorney to make sure that yours will be safe.

Non-exempt assets are those that will be included in the bankruptcy estate and you must surrender in order to process your bankruptcy discharge. The bankruptcy trustee will use these assets to liquidate them and use the cash proceedings to pay your creditors before any debt can be discharged.

The law currently states that $16,500 of your home’s equity is exempt or double that amount if you’re married. Also you may exempt up to $2,500 of your vehicles total value. Home items like your furniture, items in your wardrobe and home collectibles may be exempt up to a value that can be determined by your attorney since this also varies per state. Any health or medical aids that you need for treatment or life support that are of high value are also exempt.

Any personal injury compensation, and disability payments that you’re receiving may also be exempt depending on which state you’re in.

Other assets like pension plans in which employees contribute to ERISA qualified plans, or deferred compensation plans, health insurance plans and certain annuities can be considered bankruptcy exempt assets.

Education funds to your child’s college education, or state tuition programs that were started at least one year prior to filing for bankruptcy, can be excluded from the bankruptcy estate. These funds educational funds however must clearly have as a beneficiary a child or grandchild of the debtor.

Can I exempt my house entirely?

Typically no, but in today’s crashing real estate market it is difficult to find a home with a significant amount of equity worth liquidating for the bankruptcy trustee. So presently you may be able to keep your house if the trustee is not interested in selling it, but you must continue to pay the mortgage on it even after you get a discharge since this is a secured debt.

If there’s more equity in the home than the allowed exempt amount of $16,500 or double if you’re married, then it is likely that the trustee will move forward with including the property in the estate and sell it. However if the equity is below the allowed amount then you should be fine just make sure you pay the mortgage. Also remember that the lender is not interested in the house, they’d rather you got caught up on payments and will only proceed with foreclosure as a last resort since this is typically an expensive and time consuming effort for the lender.

Can I exempt my vehicle?

Vehicles normally depreciate in value rather quickly, so unless you own luxury or vintage vehicles that hold good value and are above the allowed exemption value of $2500, the trustee will also probably choose to overlook this asset. Most people own vehicles that they’re either leasing or still paying for and because of the depreciation value of most vehicles it is difficult to consider them in the bankruptcy estate as worthy assets. So if your vehicle is a couple of years old with moderate to high mileage you probably have little to worry about.

When can I exempt everything?

If you’re filing chapter 7, more than likely you won’t have to try too hard to exempt certain things you own since most people who file chapter 7 bankruptcy have already exhausted their own resources to get caught up and failed. Including selling some of those assets. In most cases there were never really any assets to begin with. This is why often chapter 7 bankruptcy cases are no-asset-cases, in which the largest if any assets at all are the individual retirement accounts the filers have through their employers. Even if there are assets that can be liquidated they’re often overlooked due to the exempt assets rules.

There will be cases in which the filer has a significant amount of non-exempt assets and there are legal ways of converting non-exempt assets into exempt assets, these circumstances are unique and this will not apply to everyone who has a lot of assets. This can only be done by a seasoned bankruptcy attorney so do not make any assumptions on your own, this can be very serious if it is determined that you tried to purposely defraud or hinder the proceedings. If this is the case for you, then take this very seriously and talk with a bankruptcy attorney because bankrutpcy excemptions are a very important part of the process and most people simply do not have the knowledge to do this correctly.

Your initial bankruptcy consultation

If you haven’t yet contacted a bankruptcy attorney to talk about your case, read our bankruptcy services review, and fill out the online evaluation form and be contacted by a bankruptcy attorney in your local area to discuss your case for free.

This initial consultation with your attorney is a very important step in your process of filing for bankruptcy, this is an opportunity to really understand the process and get a very good feel for what you can expect. You need to be well prepared for your initial bankruptcy consultation in order to get the most out of it. If you leave your attorney’s office still feeling doubtful about the whole process, then either you did not ask the right questions or your attorney failed to educate you and put you at ease about your doubts.

Bankruptcy consultations should be free, if you decide to contact local attorneys in your area and you find that they charge a consultation fee, just keep going down the list of numbers in the phone book. Many and perhaps most bankruptcy law firms offer free consultations.

How you can prepare for your bankruptcy consultation

More than likely you’ll get anywhere from 30 minutes to an hour to talk with your attorney, there will not be enough time to have a long conversation, so you need to prepare your questions carefully making sure that your questions are concise and direct. You should have no more than 5 questions for your attorney, the attorney will need the rest of the time to explain the process of filing bankruptcy and to run the means test, which will determine if you even qualify for bankruptcy and if you do, which bankruptcy chapter will fit your situation best.

Identify the key elements of your case and be sure to bring them up to your attorney during the consultation. These are situations like, if you’re married and prefer to file alone, if you’re in a divorce process or if you have been the victim of identity theft. Do you own a business? And is the business the reason for you needing to file? These situations may complicate your case so it’s important you bring them up now so that a better strategy can be planned for your bankruptcy petition paperwork.

You also need to make sure you express your intentions to your attorney as far as the outcome of the process. What do you really want out of this? Do you simply want to get your unsecured debts discharged? Do you want to keep your home or surrender it? It’s important that you bring this up, because often people get the wrong idea about filing bankruptcy and think that it’s the be all end all for discharging debt and that’s almost never going to be the case, since not all debts can be discharged.

As mentioned above, your attorney will more than likely want to run the bankruptcy means test to determine under which bankruptcy chapter your situation can be best handled, so you need to bring some information with you. You need to prepare this in advance, do not try to keep it all in your head.

Make a spreadsheet of all your debts and liabilities, this should include credit card bills, department store accounts, unsecured loans, car payments, tax bills, student loan payments etc. Then make a separate sheet for your living expenses. Your living expenses are things like your rent, utility bills, medical insurance premiums and life insurance premiums, food costs, clothing and other personal necessities that your family requires to live comfortably. Finally, you need a separate sheet that lists all your sources of income, to include disability benefits, social security, VA benefits etc and all your assets like stocks, bank accounts, retirement accounts etc.

Do not try to cheat by hiding anything here, you need to disclose everything accurately, for if you fail to do so your bankruptcy file may be found fraudulent and you could end up paying a fine and lose your right to file again. Bankruptcy law is specific and like any other law it makes no exceptions when mistakes are made, it’s easier for you to make a mistake if you file bankruptcy alone, whereas hiring a bankruptcy law firm or attorney will prove to be more effective, particularly when listing and designating your assets as either exempt or non-exempt.

How you should proceed after your consultation

After your initial consultation, your attorney will give you some paperwork to fill out should you decide to file with their firm. This paperwork will have questions which will ask you to describe in detail everything you listed in the spreadsheets you made about your debts, liabilities, expenses, income and assets. That’s why it’s important to prepare these spreadsheets in advance and keep them handy.

You also should take a day or two to think about what you just discussed with the attorney and if you don’t feel comfortable about the outlook of your case, you may want to consider consulting with a second attorney or even a third one. Bankruptcy attorneys are typically very good at what they do and know the law well, but often you’ll find attorneys who don’t really care about the stress you’re going through and do not take the time to offer any comfort or offer alternative solutions. Find one that can be more sympathetic and is genuinely interested in your case and of course one that can give you a free bankruptcy evaluation, again you should never pay for a consultation.

if you’re married, discuss things with your spouse, even if you’re filing alone. Be absolutely sure that this is the right move and if you have not yet considered any alternatives to bankruptcy then you might want to read through the post on bankruptcy alternatives and it may just present some options that you had not thought of or thought were possible.

If other alternatives do not appear feasible, once you’ve decided to file your petition, start filling out your paperwork, and again, make sure that your information is accurate and you have not mistakenly or purposely entered the wrong information on these documents.