Filing Chapter 13 Bankruptcy

Chapter 13 type of bankruptcy is a reorganization or a repayment plan of debts usually provided by credit counseling agencies. It is required by the new bankruptcy law that a person who wishes to file bankruptcy must attend credit counseling session, a documentation of proven attendance of services provided by a credit counseling agencies. With the new bankruptcy law under BAPCPA effective last October 2005, people filing bankruptcy chapter 13 has increased. The new bankruptcy law indirectly encourages people to file this type of bankruptcy.

In order to qualify for a chapter 13 type of bankruptcy, a consumer must have a steady income that when minus all expenses, it still leaves an amount that can pay his debts for an agreed period of time. Filing Chapter 13 bankruptcy has advantages over a chapter 7 type of bankruptcy. It can save the home of a person that is set up for foreclosure. It also gives the debtor chance to reschedule secured debts. The disadvantage of filing bankruptcy chapter 13 is that its record will stay in your credit report up to ten years. This will make it hard for you to obtain a new credit without the permission of the court. Other creditors and lenders will also not risk lending money to people who has a huge red flag on their report credit.

How do you file chapter 13 bankruptcy? The way to file chapter 13 type of bankruptcy is to go first to a credit counseling agency. You have to attend their credit counseling sessions and ask for a documentation of your attendance from them to complete a requirement on the new bankruptcy law. Most likely they will provide you a repayment plan that you will use to propose to your creditors, usually it is in the time period of three to five years.

To be able to do all of this you have to make a bankruptcy petition, and you will need to hire at least a petition preparer if not a bankruptcy lawyer if you do not want to do all the work by yourself. This can really save you some time because petition preparer's main job is to provide information on all your bankruptcy documents which can take you more of your time if you will do it on your own. Make sure you hire a petition preparer or a Denver bankruptcy lawyer that follows the legal rules. One thing you should note is that petition preparers are not authorized to give you legal advice. Hiring a bankruptcy lawyer might be the most effective solution to ensure you file chapter 13 correctly.

If you have some questions regarding filing chapter 13, then you will need to hire a good bankruptcy lawyer. If you want to save some money you can hire a bankruptcy lawyer to just prepare your papers and pay their flat fee, then do the rest all by yourself. If money is no problem in hiring a bankruptcy lawyer then this can be easy for you, you can let the bankruptcy lawyers do all the work.

In order to file for a chapter 13 type of bankruptcy affordably, you can just hire a petition preparer to prepare your papers. Then you can pay him the flat fee and you can start doing the rest of the bankruptcy process.

Filing Chapter 7 Bankruptcy

Almost all people who decide they need to file bankruptcy will first look at chapter 7 type of bankruptcy. This is because out of all the types of bankruptcy, chapter 7 seems to be the best in eliminating those pesky debts. After all, it would be a great relief to make all those debts disappear at the same time. But before you indulge in filing for chapter 7 bankruptcy, remember that your properties will be sold and the generated proceeds will be distributed to your creditors if you have equity.

Chapter 7 is a type of bankruptcy that allows an individual to set a legal action to discharge all of his debts in exchange for his properties to be liquidated. Not all properties are sold; there are certain types of properties stated in the bankruptcy law that allows a person to keep some of his properties. These properties that can be kept are called exempt properties. Before you can file bankruptcy chapter 7, there will be a meeting of creditors which you will need to attend and they will question your ability to pay.

To be able to qualify for a chapter 7 type of bankruptcy, you need to take the means test. This test will provide the information needed to prove that you have no other way out of your debt. You can easily file for chapter 7 if your income is below average because you will have a greater chances in passing the means test. When you file bankruptcy chapter 7, it will cost less than chapter 13 that requires you to propose a repayment plan to your creditors. This repayment plans are usually provided by a credit counseling agencies which you need to pay them for their services.

Currently, the changes in the bankruptcy law under Bankruptcy Abuse Prevention and Consumer Protection Act or BAPCPA last October 2005 have made it even harder for people to file bankruptcy chapter 7. This is because people tend to take advantage of the bankruptcy system. Before the changes in the bankruptcy law last 2005, people could easily choose between chapter 7 or chapter 13 bankruptcies. Many file, for the relief it provides, choose chapter 7 even though they can still pay their creditors using a chapter 13 type of bankruptcy.

In order to save time and money before you intend to file for a chapter 7 type of bankruptcy, take a look at your monthly income and see if your income is categorized below the stated average income of your state. If your income is below average, this will make your case in the court stronger.

Do not try to grasp all this on your own. Hire a Denver bankruptcy lawyer that has the experience to get your through the process so you can more on with your life. Bankruptcy lawyers help people in your situation everyday.

This needs a lot of self study and takes tons of your time. I suggest hiring a petition preparer or a Denver bankruptcy lawyer to do prepare your documents and then do the rest by yourself. which is the best way to file bankruptcy. This way it is cheaper and you just do a little work yourself. For more information on how to file bankruptcy visit the website below.