You don’t need to hire a lawyer to file bankruptcy, but keep in mind that just because you file for bankruptcy protection doesn’t guarantee that a judge will ultimately accept your request. Following these essential steps can help prevent a bankruptcy judge from rejecting your case:
1. Pre-bankruptcy credit counseling is required for everyone planning to pursue this type of debt assistance. Credit counseling must be completed through a federally-approved agency; most sessions last about 60 to 90 minutes.
2. Choose the right type of bankruptcy to avoid potential legal snags. Chapter 13 might be the best bet for working debtors who can afford to partially repay their obligations and want to cure any mortgage defaults and keep their homes. Not everyone qualifies for debt elimination through Chapter 7; debtors who earn more than their state’s annual median income level usually must declare Chapter 13. The annual median income as of 2010 for a single Alaska resident was $52,130 while the figure for a four-person family living in Arkansas was $57,905.
3. Stay on top of paying your required court costs. As of 2010, it cost $274 to file Chapter 13 and $299 to declare Chapter 7. Most debtors must pay these fees upfront; checks, credit cards and debit cards are not acceptable forms of payment for bankruptcy court costs. If you’re in severe financial distress, talk to your local bankruptcy court staff about applying for a fee waiver or an installment payment plan.
4. Know what debts you cannot include in bankruptcy. If you owe a lot of back taxes, child support, alimony, court fines or federal student loans, bankruptcy may not be the right answer for your financial problems. Familial support debts and bills related to illegal activities cannot be included in any type of bankruptcy, even if you’re in dire financial straits.
You can only include federal, state and local income tax debts if they were incurred at least three years before you file bankruptcy. Unless you can convince a judge that you are seriously disabled and cannot repay your federal student loans, you’re out of luck when it comes to such obligations.
5. Attend all required court hearings. If you can’t afford to hire a lawyer, you really must stay on top of your postal mailbox so you can read any bankruptcy hearing notices. Generally, debtors declaring bankruptcy must attend at least two court hearings to finalize their cases. If you don’t show up, then a judge will dismiss your request.
For more tips and tools to help you manage your debt, visit Quizzle.com, where you’ll get access to a Credit Personal Trainer to help you whip your credit into shape and affordable credit monitoring so you know when important changes are made to your credit report.
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