If you are considering bankruptcy, you may be wondering whether to request the assistance of a qualified bankruptcy attorney or whether you should file for bankruptcy without legal help. This article will discuss the advantages and disadvantages for each one so you can make a wise decision and informed.

In the U.S., you can declare bankruptcy without a bankruptcy attorney, regardless of the state in which we live This is also called "filing pro se." If you do not have a lot of assets and their financial situation is relatively simple, may seem like a good idea to file for bankruptcy without legal help. There are numerous websites that are designed to answer many questions about bankruptcy. If you are considering filing for bankruptcy on your own, however, please be careful when searching the different web sites online, because not all websites have the most accurate information about bankruptcy and you can take in wrong direction.

Also, while you can save some money in the bankruptcy alone, there are many possible errors that can occur that can cost you more in the long run. The biggest blow of bankruptcy itself is the possibility of errors such as forgetting to put a creditor in its documentation or deadlines. This can be a big problem, because the court can not properly process the bankruptcy missing important information. This can result in delays and may even mean the dismissal of its bankruptcy case by the court. In many cases, therefore, attorney fees could be worth the extra expense to ensure that your bankruptcy process runs smoothly and that you are unaware of any difficulties before the presentation and during the bankruptcy proceedings. There is nothing better than peace of mind in an already stressful time of your life. Also, if you are considering filing for bankruptcy on your own, you should be aware that it will be familiar with the many bankruptcy proceedings, rules and exceptions in your state that have become a bit more complicated due to recent changes in bankruptcy law in the United States. This means you need time and energy to understand what to do.

Some of the advantages of getting a bankruptcy attorney include obtaining appropriate legal advice and help so you can make the right decision and avoid any possible danger. This will eliminate many errors and mistakes that are also susceptible if the bankruptcy alone. Moreover, some lenders may try to take advantage of you if you are appearing pro se. They can keep in touch with you even after the bankruptcy has been filed. As mentioned briefly above, the bankruptcy laws have changed dramatically in recent years and will probably continue to change. Therefore, if you're not on top of the new legislative changes that may be at a serious disadvantage. I recommend that the first step should be to create a consultation with a qualified bankruptcy in your area so you can at least get a better idea of ​​what to do and see if the bankruptcy is still an option to choose. Many law firms have a free initial consultation, so we really will not hurt you to make an appointment to go see one.

Bankruptcy is considered the last resort or the ultimate solution to most problems of debt. If you have excessive debt, credit card or other debts such as medical bills, utilities, foreclosures, tax debts, domestic relations proceeding, the demands of contingency debts malpractice, etc., that could end with them by declaring bankruptcy. However, the decision to file for bankruptcy is not an easy task for most people because it involves a lot of prenatal care financial planning, legal advice and future consequences.

The U.S. Bankruptcy Court advises people to take the following precautions when filing for bankruptcy. The rules around declarations of bankruptcy are very technical, and one misstep can affect the debtor's rights and thus their right to file for bankruptcy. For example, if a debtor in bankruptcy may be dismissed for failing to file a document required a certificate of credit counseling, income and expenditure report, the SIN card, etc.

i) Bankruptcy is a long-term decision and has a lot of consequences in the future. It is therefore advised to hire a competent bankruptcy attorney or lawyer who has many years of experience and 100% success.

ii) Be wary of companies advertising that can help you file for bankruptcy more expensive than a bankruptcy attorney can most of the time, these companies are not really out to help, but only to defraud you of your money. These companies are by law not allowed to help file for bankruptcy clients, which only can help fill in the forms of bankruptcy. A bankruptcy attorney instead has the knowledge and experience to give legal advice, answer all your questions and help you through all legal proceedings, and set the credit counseling service of qualified credit counselor.

One of the most powerful features of bankruptcy is that debt collectors calling you, harass or threaten to pay outstanding debts. Once you file bankruptcy, all collection activity on the debt has to go through the bankruptcy court and creditors can not take any action against him. Following the declaration of bankruptcy, something called the "automatic stay" will come into force. The automatic stay prohibits creditors and collection agencies contact you or take any action against him, except for certain secured debts (see below). Let's review some of the debts can be discharged through bankruptcy and debt collectors who can not take any action against him.

TIP: It is necessary to stop the bankruptcy creditors calling you or threaten or harass you. Instead, you can write a stop contacting me letter to debt collectors and the Fair Debt Collection Practices Act (FDCPA), your creditors are not legally permitted to contact you for collection calls debt. Rather than threaten you by phone, you could threaten to refer to your phone calls to the police if they keep calling.

i) the credit card debt, medical bills or attorney fees

All debt collection activity in connection with credit card debt, medical bills or attorney fees must cease once bankruptcy. Creditors can not file a lawsuit against him and even if they do, they may proceed in court because you have the automatic stay (see above). Creditors can not also record liens against their property, forcibly seize his property (which makes threats of debt collection pointless), or a report of its debt to a credit bureau. In addition, any incorrect information spread over the bankruptcy is a violation of the automatic stay and is illegal in the eyes of the law.

ii) Public Benefits

Bankruptcy protects you from government agencies in court or complete their public benefits like Medicaid, Social Security Income or welfare benefits you are receiving. The only time you can interrupt the public service is whether the nature of being eligible.

iii) Criminal Procedure

Collection of criminal fines, debts or penalties including criminal fines can not be suspended after the bankruptcy. If you have a criminal case, you will still have to go through them with the pending bankruptcy.

iv) The exclusion Home

The foreclosure proceedings may be initially left off when you file bankruptcy, however, a builder or your lender may ask the judge to lift the stay and proceed with the foreclosure, so you should not expect the bankruptcy of suspend the home foreclosure proceedings. This means that homes and mortgages taken out on houses are not subject to bankruptcy protection. In addition, the automatic stay does not apply if you filed a new bankruptcy in the past two years and the court in this procedure allows the lender to continue the foreclosure process due to a determination that declared bankruptcy as a way to transfer their assets or interests unduly hinder or defraud creditors or a bankruptcy system manifold. In short, you can not avoid home foreclosure by filing a series of bankruptcies.

v) Evictions

An automatic stay of bankruptcy can not stop an eviction if the owner already had a trial that allows you to evict you from your property before the bankruptcy was filed. In addition, the owner may proceed with the eviction of the tenant if the tenant can prove that the property say a danger, as the illegal use of drugs, chemicals, grow ops, etc

vi) Utilities

Service companies that provides gas service, water, electricity, heating fuel or the phone can not suspend service as a result of the bankruptcy. However, they have the right to cut service 20 days after filing for bankruptcy if they do not give a deposit or other means to secure future payments of invoices.

vii) Income Tax

An automatic stay stops the Internal Revenue Service (IRS) issues a lien on your tax return or forfeiture of his property or income. However, the IRS may continue to demand the following personal tax files:

* File a tax return
* Make a Tax Audit
* Issue a notice of tax deficiency
* Take advantage of your tax refund to pay the debt a year before taxes.

One of the requirements for filing Chapter 7 bankruptcy will undergo a "means test" and to report current monthly income to the bankruptcy court. A means test is a mathematical calculation performed in three stages on income and expense sheet that makes people who are abusing the bankruptcy system. If a debtor qualifies Chapter 7 at any step in the calculation of three steps, then he / she is automatically eligible for the protection of Chapter 7 bankruptcy, the other conditions apply. The three-step calculation is as follows:

i) Step 1 - Median Income Test
ii) Step 2 - The means test calculation
iii) Step 3 - Multiply the guarantee non-priority debt by 25%

Step 1 - Median Income Test

The first step of the process is Chapter 7 to compare the debtor's current monthly income to state income of the median. "The state median income is determined for each of the 52 U.S. states from the U.S. Census Bureau, and this report is published every year. Proof of means of each individual is based on the state residence and number of dependents in the family of the debtor. The average income compared to the currently monthly income (CMI) of the debtor. If the current monthly income is less than the state median income, the assumption of abuse the system is void and the debtor qualifies for Chapter 7 protection.

So what factors are included in the calculation of monthly income today? CMI is calculated on the average monthly income from all sources during the last 6 months before filing for bankruptcy with the last calculation ends on the last day of the month prior to presentation. CMI includes the following revenues:

* Business net income (after all expenses paid)
* Interest, dividends and royalties
* Pensions and retirement income
* Gross wages (before taxes), including wages, tips, bonuses, commissions and overtime.
* Unemployment benefit is not a social security benefit
* Rental property and other income
* Receipts for alimony or spousal support

Step 2 - The means test calculation

If the chapter 7 debtor's current monthly income is greater than the state median income, then we have to calculate the step 2. The debtor's current monthly income is reduced by taking some of the standard costs, and expenses qualified personnel. Here is a list of deductions that can be made of CMI:

* The costs of childcare as a court ordered a spouse / child support payments
* Average monthly federal, state, social security, self-employment or Medicare taxes
* 401k retirement contributions, work uniforms and payments from the union
* Standard local IRS mortgage or rental costs reduced the amount of spending 60 months on average compared mortgage real
* IRS local standard for housing and utility expenses excluding mortgage (see above).
* IRS national standard for food, clothing, household items, staff costs and various other types of care.
* Telephone charges incurred to maintain the health and welfare of the debtors, including mobile phones, Internet service, call waiting, voice mail, caller ID, long distance and more.
* The costs of health insurance of debtors are not covered by a savings account for health
* The costs of education needed to maintain current employment of the debtor or a child's physical / mental dependents.
* IRS standard transport costs and leasing the property at least 60 months on average current payment of the insured vehicle

A Chapter 7 bankruptcy frees you from personal liability for the debts of high and let the creditors to contact you or threatening you, or take any action against him in an attempt to collect those debts. The U.S. bankruptcy court estimated that almost 99% of all applicants for Chapter 7 bankruptcy shocked if it is your first time, mainly because of their low incomes and high debt ratios. Under the Bankruptcy Code 4004 (c), most bankruptcies are discharged within 60 to 90 days after the petition is filed to the court and the creditors' meeting is held. Therefore, there is very little chance that will not be granted a discharge in Chapter 7 bankruptcy. Among the reasons why a Chapter 7 discharge can not be granted include:

* You did not explain clearly the loss of use of assets
* You are not filed financial records, credit card or other important evidence made by the bankruptcy trustee
* You did not attend the hearing in bankruptcy court or meeting with all creditors
* Property is transferred fraudulently to his relatives / family, hidden or destroyed property that would have otherwise become the property of the bankruptcy court under USC § 727 of the Bankruptcy Rule 4005.
* You have made false statements or promises to the order of the Oath.

Note that some states allow creditors to still retain the rights of property that has been discharged in Chapter 7 bankruptcy. A debtor who wishes to dispute that right must be willing to "reaffirm" the debt, that is, must be willing to make payments on the debt based on a modified payment schedule with a lower interest rate and principal payment. Take a simple example. You own a car worth $ 8,000 you would like to keep after you receive your Chapter 7 bankruptcy. However, only the majority of states allow a vehicle up to $ 5,000 of value, therefore has a value in excess of $ 3,000 that can be reaffirmed by the creditors. If creditors do not wish to retain the rights to $ 3.000 in order to minimize their losses, the bankruptcy trustee U.S. asked to sign a "reaffirmation agreement" with that will have to make monthly payments to creditors in excess of this value $ 3.000 you want the right to maintain.

In short, a reaffirmation is an agreement between you and the creditor that you will continue making payments on some debts, even after receiving their Chapter 7. In return, the creditor promises that as long as you keep making payments, he / she will not recover the assets you'd like to keep after bankruptcy. If you choose to reaffirm a debt, the reaffirmation agreement must be signed and complete before the discharge is granted. A written agreement to reaffirm the debt must be signed and a copy to the bankruptcy court and you do not have a lawyer representing him, the agreement must be approved by a judge.

Most people I meet a lot of questions about the short term and long-term consequences of filing bankruptcy, short sale of their homes, and to be seized. Many of the bankruptcy clients ask how long they should wait before buying a home again after bankruptcy, short sale and foreclosure, and mistakenly think they are going to have to wait 7 to 10 years to buy another home. I explain that despite the bankruptcy filing will remain 10 years on your credit report, you can still get credit to buy a house.

There are different periods to wait after filing bankruptcy, participation in a short sale, foreclosure or having to obtain a mortgage loan with FHA, VA and conventional financing. We understand that these guidelines are based on current FHA, VA and conventional financing parameters and can be changed. Ask a mortgage lender if these terms have changed. Chapter 7 Bankruptcy: FHA requires 2 years from the date of discharge or dismissal with the exception of extenuating circumstances. VA requires 2 years from the date of dismissal or dismissal. Conventional financing requires 4 years from the date of dismissal or dismissal.

Chapter 13 Bankruptcy: FHA requires one year of Chapter 13 payments have been made on time. VA mandates 1 year of Chapter 13 payments on time. Conventional financing requires 2 years of Chapter 13 or 4 years from the date of dismissal.

Foreclosure: FHA requires 3 years from the date of completion of foreclosure. VA mandates 2 years from the date of completion of foreclosure. Conventional financing requires 7 years from the date of completion of foreclosure.

Short Sale: the mandates of the FHA one year from the date of short sale if there are no delays in payments. If there were delays in payments, FHA mandates of the three years from the date of short sale. VA mandates 2 years from the date of the short sale. Conventional funding mandates 2 years for a maximum LTV of 80%, 4 years for a maximum LTV of 90%.

Although bankruptcy has a negative effect on your credit, you can get your finances in order and buy a house within a short time. Also interesting to note how different financing FHA, VA, conventional and treat Chapter 7 bankruptcy, Chapter 13, short sales and foreclosures. Based on current lending criteria, it seems more prudent to file a bankruptcy and conduct a short sale, at the same time instead of allowing the house to foreclosure. For example, conventional financing requires a short sale to wait two years for LTV 80% compared with a foreclosure to wait 7 years.

Contact an experienced bankruptcy lawyer in your state about your specific case because no two cases alike. This article is not intended to provide legal advice, but merely to provide information.