Private Bankruptcy Filing

It is not only businesses and firms that can file for bankruptcy. An individual can also file for one if he is weighed down with debts and can't pay his creditors due to unemployment, medical expenses, or other astonishing costs. Filing for bankruptcy can be the answer to relieve an individual from eligible liabilities and to give him a fresh start to manage his finances better.

Options for filing

One has the option to file for a Chapter 7 or a Chapter 13 bankruptcy. A chapter 7 bankruptcy enables one to pay off his creditors by the liquidating all the non-exempt assets like cars, real estates, boats, and so on. This may be done by the bankruptcy trustee who will then allocate the converted money the creditors. This can discharge the debtor from all eligible debts. A chapter 13 bankruptcy, on the other hand, permits one to propose a payment scheme of three to 5 years to pay all his debts.

Hiring a lawyer

Although it is not fully important to hire a counsel when filing for bankruptcy, it remains strongly recommended. Bankruptcy laws can be complex and it's always best to seek legal advice. Lawyer's fees can range from $1,600 to $2,000 so go ahead and hire one if you can afford to.

Fees

A Chapter seven sometimes costs around $274 whilst a Chapter infrequently are added to file. Except for these, there are still other court fees to pay like appeal charges and requests for certification among others. Rates are subject to change and may alter state to state.

Although the debtor can be relieved of his debts when filing for bankruptcy, it is not without a downside. The move will reflect on his credit score and it will make it hard for him for him to get credit.
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