Common bankruptcy questions
Many of the thousands of people who are considering filing for bankruptcy every day have questions about the process. If you are facing seemingly insurmountable debt, you probably have some questions, too. Here are the answers to the most common personal bankruptcy questions:
Q How much does it cost to file for bankruptcy?
R. This is the most common bankruptcy question; costs vary, but you can expect to pay the court fees, which are about $250, the fees to take a required credit counseling class, which is usually about $75, and attorneys fees, which can be several hundred dollars. A thousand dollars would be a good estimate.
- Are there any alternatives to bankruptcy?
- Yes, there are. There are professionals who can help you by negotiating payment arrangements with your creditors, credit counseling agencies, consolidation loans, and other options you may wish to look into.
- Can I erase all my debt with a bankruptcy claim?
- Not necessarily. There are some debts that you can never get rid of, such as child support payments, back taxes, and student loans. There are also some debts you may wish to exclude from your bankruptcy, such as your mortgage or car loan if you wish to keep them and can show that the bankruptcy will discharge enough of your debt to make it possible for you to afford to successfully manage those payments.
- Does a bankruptcy totally ruin my credit rating?
- It is the most devastating thing you can do to your credit history, yes.
- Is anyone allowed to file bankruptcy?
- Yes, anyone can attempt to file for bankruptcy, but there is no guarantee that a judge will award it. The bankruptcy laws are getting stricter all the time, and if your income is above a certain amount, you will not be allowed to file under Chapter 7. If you are forced to file under Chapter 13, your debts are reorganized, not dismissed, so you will still have to pay.