On October 18, 2005, the new bankruptcy law, called the "Bankruptcy Abuse Prevention and Consumer Prevention Act of 2005" (BAPCPA), went into effect in the United States. At that time, there was no anticipation that a rising higher bankruptcy costs would sooner result with the new law. However, recent reports find that the new law brought such results, and that there are more American debtors going bankruptcy without lawyers.
Chapter 7 bankruptcy is the option for the debtors to get rid of all the debts that they owe to various creditors. In this method, the bankruptcy court appoints a trustee to liquidate all the assets of the debtor and settle the claims of the creditors with the money thus collected. The advantage to the debtor is that he or she is now responsible to pay as much debt as is the value of their assets.
They will not have the obligation to repay the debts that could not be paid with the money collected from liquidation of assets. That is the reason most people who have caught themselves in too much debts to be paid off with the means and assets available to them look at chapter 7 bankruptcy as an attractive option. It provides them an excellent opportunity to give their financial life a fresh start with no obligation to repay the debts they owe.
Whether or not the chapter 7 bankruptcy is easy for the debtors depends upon the specific bankruptcy case. However, in order to prevent bankruptcy frauds, the bankruptcy laws require the debtors to go for a "Means" test before they are declared as bankrupt. The objective of the means test is to compare the debtor's monthly income to that of the state's median income. If the debtor's monthly income is greater than the state's median income, he or she is not granted bankruptcy under chapter 7.
It is, however, on the second major consequence caused by the law, that its impact has become far more profound for the average debtor or bankruptcy filer. Namely, on the fact that the new law has made bankruptcy far more cumbersome for the debtors, and has simply brought rising higher bankruptcy costs, causing debtors to seek cheap affordable bankruptcy without lawyer.
The Charges. There is usually a ONE-Time PAYMENT ONLY amount. One of such agency's charge, for example, is $239 for a Chapter 7 bankruptcy; and $359 for Chapter 13. The price charged by these agencies tend strictly to follow an honest, upfront pricing that's based ONLY on "per project," rather than on "per hour." (That's in contrast to the attorneys' charges, which are frequently based on "per hour" hourly rate). This means that, once a reputable Bankruptcy Petition Preparer (BPP) takes any case from a debtor, you pay the BPP Agency, assuming it's, say, a Chapter 7 case, just $239, and NOT a penny more on it, ever - no matter how many creditors you have (whether they're 10 or 20, or 200), or you happen to start out with 10 creditors, but turn up 100 or 200 more later. Or, you have to file some additional papers to get some of your secured debts "affirmed" so you can keep, say, your car, etc. YOU JUST PAY THEM NOT ONE PENNY MORE. PERIOD! Thus, for most debtors, bankruptcy with no bankruptcy attorney assistance, offers the debtor low-low affordable costs and rates and is the only way to go.
Chapter 7 bankruptcy is the option for the debtors to get rid of all the debts that they owe to various creditors. In this method, the bankruptcy court appoints a trustee to liquidate all the assets of the debtor and settle the claims of the creditors with the money thus collected. The advantage to the debtor is that he or she is now responsible to pay as much debt as is the value of their assets.
They will not have the obligation to repay the debts that could not be paid with the money collected from liquidation of assets. That is the reason most people who have caught themselves in too much debts to be paid off with the means and assets available to them look at chapter 7 bankruptcy as an attractive option. It provides them an excellent opportunity to give their financial life a fresh start with no obligation to repay the debts they owe.
Whether or not the chapter 7 bankruptcy is easy for the debtors depends upon the specific bankruptcy case. However, in order to prevent bankruptcy frauds, the bankruptcy laws require the debtors to go for a "Means" test before they are declared as bankrupt. The objective of the means test is to compare the debtor's monthly income to that of the state's median income. If the debtor's monthly income is greater than the state's median income, he or she is not granted bankruptcy under chapter 7.
It is, however, on the second major consequence caused by the law, that its impact has become far more profound for the average debtor or bankruptcy filer. Namely, on the fact that the new law has made bankruptcy far more cumbersome for the debtors, and has simply brought rising higher bankruptcy costs, causing debtors to seek cheap affordable bankruptcy without lawyer.
The Charges. There is usually a ONE-Time PAYMENT ONLY amount. One of such agency's charge, for example, is $239 for a Chapter 7 bankruptcy; and $359 for Chapter 13. The price charged by these agencies tend strictly to follow an honest, upfront pricing that's based ONLY on "per project," rather than on "per hour." (That's in contrast to the attorneys' charges, which are frequently based on "per hour" hourly rate). This means that, once a reputable Bankruptcy Petition Preparer (BPP) takes any case from a debtor, you pay the BPP Agency, assuming it's, say, a Chapter 7 case, just $239, and NOT a penny more on it, ever - no matter how many creditors you have (whether they're 10 or 20, or 200), or you happen to start out with 10 creditors, but turn up 100 or 200 more later. Or, you have to file some additional papers to get some of your secured debts "affirmed" so you can keep, say, your car, etc. YOU JUST PAY THEM NOT ONE PENNY MORE. PERIOD! Thus, for most debtors, bankruptcy with no bankruptcy attorney assistance, offers the debtor low-low affordable costs and rates and is the only way to go.
About the Author:
Frank Miller has a Debt Consolidation Blog & Finance, these are some of the articles: How Diligent Fort Collins Bankruptcy Attorneys Helps Alleviate Stress Of Debt Collections You have full permission to reprint this article provided this box is kept unchanged.
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