Bankruptcy Services

     There are many entities, law firms, credit counseling agencies, and the federal bankruptcy courts that offer bankruptcy services to debtor's who are considering filing for bankruptcy.  All the potential filer has to do is check around on the internet or look in the phone book to find that entity that is right for him.  They all provide bankruptcy services for evaluating the potential filer's situation to see if filing bankruptcy is the right move for him.  It may be that a debt consolidation loan, debt counseling services or financial management services might be all the individual needs to help him out of his financial difficulties.  He might just need someone to contact his creditors and work out a payment schedule.  These kinds of  bankruptcy services are readily available from credit counseling agencies and law firms.  They charge for their services, but they may be well worth the expense.

What Bankruptcy Services Do

     Bankruptcy services begin with the evaluations of the debtor's situation.  The 2005 law, the Bankruptcy Abuse Prevention and Consumer Protection Act requires an income means test in which the debtor's average income is determined over a six month period and is compared with the median income in his area. The debtor cannot use Chapter 7 bankruptcy if his income exceeds the median income. The next step for those with below median incomes involves the computation of disposable income.  Expenses, based on IRS standards, are deducted from the average income.  The debtor will qualify for a straight bankruptcy filing if his disposable income is less than $100.  Liquidation of assets requires that a value has to be attached to the assets.  The 2005 law requires market replacement valuation of assets. Since this process can get quite complicated a professional bankruptcy service is recommended.

     Chapter 13 bankruptcy requires restructuring of the debt and payment schedules or a three to five year period. This involves negotiation with creditors to work out a plan.  These bankruptcy services can be provided by the credit counseling agency or a law firm.  The 2005 law requires debt counseling before the filing by an agency approved by the United States Trustee's office.  The agency has to develop a plan and present it to the bankruptcy court.  Neither the filer nor the court is required to accept this plan.  The new bankruptcy law also requires the completion of debt and financial management classes before the court will discharge the debt in Chapter 7 bankruptcy cases.

     In either case, the filer's credit report shows the bankruptcy filing, for ten years in Chapter 7 bankruptcy cases and for seven years in Chapter 13  bankruptcy cases.  It is imperative for the filer to re-establish credit after filing bankruptcy.  The bankruptcy services firm or the law firm can counsel the filer in this area to help him get back on his feet after the filing. It can help him with his post bankruptcy student loan, mortgages, and credit cards .

Use Professional Bankruptcy Services

     Firms offering bankruptcy services are experts in the area of bankruptcy.  They are familiar with the bankruptcy laws, the proceedings, negotiations with creditors, etc.  They know how to handle the situations that arise during the course of a case and can provide good advice to the filer. Always seek the advice of a professional in bankruptcy services.