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Which are the most common types of bankruptcy?

There are numerous types of bankruptcy. But, for the average consumer, the two main common are Chapter 7 and Chapter 13. The filing fees often change and so if I tell you the much it is today, tomorrow you might find different ones. You should check with the bankruptcy court for the current fee. Depending on your financial situation, you may be entitled to have the filing fee relinquished by the court. In a Chapter 7 case you may also file an application to pay the filing fee in parts.

You can pay the filing fee in three installments, with the first installment due twenty eight days after the bankruptcy is filed, the second installment is due the same days later, and the final installment is due as usual after the second installment. You can appeal that the court varies this payment schedule if you need more time. Nonetheless, if you fail to pay an installment on time, your case will be dismissed by the court.

Credit counseling

Prior to filing for bankruptcy, you must complete a credit counseling course. After you file bankruptcy, and before you can receive a final discharge of your debts, you must complete a debtor education course. Both of these courses can be completed on the internet or on the telephone.

Documentation to submit

During the course of the bankruptcy court happening, you will be obligated to submit a copy of your most recent federal tax return, or a tax transcript. You generally must submit this information even if you have not filed federal taxes for a number of years. You can obtain a copy of your tax transcript from the Internal Revenue Service.

More facts on chapter 7 bankruptcy

Chapter 7 is also called a “liquidation bankruptcy,” because the debtor is alleviated of personal liability for all debts with certain exceptions. In return, a debtor must give up possession of his or her assets, with certain exceptions) as well. While a Chapter 7 bankruptcy is a valuable tool for the debtor, a debtor only will be granted a discharge one time every eight years and it generally takes about three months to complete.

If the debtor does not have any property to allocate to creditors, those debts which can be discharged are done so even if they are not listed in the bankruptcy petition

Some debts are not discharged by a Chapter 7 bankruptcy. The most common of these debts are child support, spousal support, criminal restitution and criminal fines. For example, debts arising out of giving a forged financial statement, deceitful use of a credit card, for obstinate and cruel injury, may not be expelled.

Law recognizes that l some property are essential for your survival, like your working tools, value of insurance, federal earned income tax credit, savings or retirement accounts, and home are exempt.

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