Filing Your Own Bankruptcy

There are so many companies that claim to make getting out of debt easier than ever, lowering monthly payments up to 80 percent. These may be good options for some people, but for people who simply can't afford to pay off old and outstanding debts bankruptcy may be the answer. To determine which group a person falls in, they should contact a credit counseling service to make a tentative repayment plan of their debts.

If the payments fit into the person's budget and the term of repayment would be less than the mar of a bankruptcy on their credit report (ie seven to ten years) the person may want to consider credit counseling to repay debts instead of a bankruptcy.

This is important to verify with the credit counselor before making any decision: will paying off these debts actually improve credit? In some cases even paying off the debts in full will not completely repair credit, in some cases the slow payments can be equally damaging on a credit report as a bankruptcy.

Going "It" Alone

Most people use a lawyer to file bankruptcy, this is usually because they are scared of all the legal terms, "mounds" of paper work, and having to deal with judges or lawyers alone seems intimidating. This can be true depending on the individual situation; cases that deal with more than one home, more than one car, alimony or child support, and/or student loans may need the legal expertise of a lawyer.

For people with debts such as credit cards, signature loans, medical bills, and the like plus only one home, one car, and no means to pay off outstanding debts filing yourself may be the way to go. All of the forms to file the bankruptcy are free and depending on the person's family income sometimes the court filing fee and credit counseling fees can be waved.

Another factor to consider before choosing a lawyer is the fees involved. In many areas lawyers charge a minimum fee for a bankruptcy, plus an extra fee for every ten or so creditors, depending on the law firm's exact policy. One should note that the court filing fees and credit counseling fees are not included in the lawyer's fees and are the responsibility of the person filing bankruptcy.

To Simplify Paperwork

If the paperwork involved seems over whelming hire a typing service. For $150-$300 dollars a person can hire a typing service to fill out all the necessary forms with the information provided by the debtor (the person filing the bankruptcy) into an easy to print and mail format.

The good part of this is that all the forms are gathered for the debtor, the forms are ready to print, many customers of this typing service are complimented for the condition of their documents even when compared to lawyers (ie the papers are more completely filled out and in better order).

The downside of these typing services is that the information on the forms is only as good as the debtor gives them. Also the debtor is completely responsible for finding addresses for every creditor, and some of the typing service sites have a limited amount of time a person can access the information.

It is important to read the company's guarantee completely and to shop around a bit to get the best price for the services. Also note the typing service can give no legal advice, they simply plug the information given to them into the correct forms and make it available for the debtor to print.

Filling out the paperwork one's self is the only difference besides the cost to the debtor when filing bankruptcy this way. The rest of the bankruptcy process would be the same with or without a lawyer.