Chapter 7 Bankruptcy, commonly called liquidation of your assets, is normally the simplest and quickest form of bankruptcy. It is available to individuals, married couples, corporations, and partnerships. A court-appointed trustee gathers and sells your non-exempt property and uses the proceeds from the sale to pay your creditors. Most Chapter 7 Bankruptcy cases are “no-asset” cases, and you will not have any non-exempt property for the trustee to sell.
Regardless of whether you have assets to sell, there are going to be costs associated with filing Chapter 7 Bankruptcy. What does it cost to file Chapter 7 bankruptcy? Like Chapter 13 Bankruptcy, there are court costs and lawyers fees.
As of September 8, 2011, the federal bankruptcy court fees for filing an initial Chapter 7 Bankruptcy, including any miscellaneous costs, is $299. The fees can be paid in four payments over 120 days. If a joint petition is filed, only one filing fee and one administrative fee is charged. Depending on how the bankruptcy progresses, there can be other costs associated with the bankruptcy such as fees associated with various motions, notices, and office costs.
What lawyers charge a client for filing Chapter 7 Bankruptcy varies by state. The lawyer’s expense is normally separate from the court costs, but some lawyers may include them in a basic plan. A basic plan usually includes the lawyer filing the initial case with the bankruptcy court, going to the 341 meeting, and handling the paperwork for filing. This basic plan most likely will not include handling any motions, notices and some of the more unusual court office expenses.
For the basic plan, the lawyer or their assistant, will be available to answer important questions that might influence the outcome of the case. In a Chapter 7 Bankruptcy, most questions concern exempt and non-exempt property and whether or not you qualify to file Chapter 7 Bankruptcy.
Before you can qualify for filing Chapter 7 Bankruptcy, you might have to take the Means Test which was implemented into bankruptcy laws in the 2005 changes. Means testing refers to the eligibility for relief for debtors who have sufficient financial means to pay a portion of their debts. Debtors whose income is below the state’s median income are not subject to the means test.
A Means Test calculator is provided to the debtors who are above the median income in their state, and it includes a formula designed to keep filers with higher incomes from filing for Chapter 7 Bankruptcy. Although the formula is complicated, the bankruptcy means test is rather generous and many debtors have no trouble meeting its requirements.
Once you and your lawyer determine you qualify for Chapter 7 Bankruptcy, the lawyer will normally file the petition and attend the 341 meeting with you. If the meeting goes well, the trustee will take over. At that point, you generally do not need your lawyer again unless complications arise or the case is closed.
Most Chapter 7 Bankruptcy cases are simple, and the trustee liquidates the assets without incident. A small percentage of Chapter 7 Bankruptcy cases become more involved. If there is a question about assets, challenges would most likely come from either a creditor or the trustee. In such rare cases, you may experience added court costs and lawyer’s fees to resolve the issue. When this occurs, a bankruptcy lawyer’s help is usually worth the cost.
Bankruptcy laws can be complicated. Contact a bankruptcy lawyer if you are considering filing for bankruptcy.
If you need relief from the stress of debt and you live in or around the metropolitan area of Ventura, California, contact us at www.betterbankruptcy.com. We will help you find a bankruptcy attorney in your area who will answer your bankruptcy questions.
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