Bankruptcy is a judicial procedure designed for persons or legal entities who are unable to fulfill their financial obligations. It provides a systematic approach to repay out-of-control balances and get your monetary life back on track. Here, we will provide a brief overview of the basic components of bankruptcy and review the idea of zero-down bankruptcy for your convenience. We will also provide an understanding of how to search for zero down bankruptcy lawyers near me.
How Bankruptcy Gets Initiated
Bankruptcy processes begin when the individual or firm voluntarily decides to file for bankruptcy, although the motion could be instigated by the creditors (those to whom the money is owed). When filing, the court looks at all of the debtor’s property and sometimes may dispose of that property to satisfy liabilities.
Understanding the Types of Bankruptcy
- Chapter 7 Bankruptcy
This entails disposing of any non-essential items such as excess equipment, real estate or vehicles, jewelry, and furs, among others. The money collected is used to pay off part of the loan and the rest; especially if it is unsecured, it is cleared. This option is usually for those who do not have adequate income to meet their obligations.
- Chapter 13 Bankruptcy
This method of debt relief involves partially erasing or consolidating the outstanding loan balance and subsequent re-establishment of affordable repayment terms for three to five years. It is for those who earn enough to pay off their debt but require more time and variability.
What Is Zero-Down Bankruptcy?
A zero-down bankruptcy allows you to file without paying upfront legal fees, though there are still some costs involved:
- Filing Fees: The fee for Chapter 7 is $335, while Chapter 13’s is $310.
- Attorney Fees: It is strongly recommended that you consult a bankruptcy attorney, as they will help you in the process. While it is common for lawyers to demand cash upfront, they sometimes help you secure bankruptcy with no down payment plan, and you pay the attorney fees later.
Extension of Time for Paying the Filing Fees
However, if you are unable to pay the filing fee in one lump sum, you may apply to make the payment in installments by completing a motion application (Form B 3A). Important points to note:
- You can pay it in installments, with a maximum of four installments.
- They must be paid in full within one hundred twenty days following the filing.
- If you do not pay or fail to complete those fees, your bankruptcy case may be dismissed, and your debts will remain unpaid.
Managing Attorney Fees
Again, most bankruptcy attorneys do not commence the case until they have been paid their fees. Specifically, when you file a zero-down bankruptcy, some legal representatives will help you commence the process without the necessity of an upfront payment and then recover their charges. Do not forget that if you have some debt to your attorney when filing, they can be considered one of your creditors.
Key Considerations
Thus, while zero-down bankruptcy may be beneficial, especially when it comes to Chapter 13, this can cost more due to the longer time taken to pay. It is important to note that you should always consider the prospects of your financial standing keenly before proceeding. In any case, it is always wise to consult an experienced bankruptcy attorney who can advise on your particular case.
Deciding whether to file for Chapter 7 or Chapter 13 is a decision that can affect one’s life for many years to come. Rather than visiting random websites or watching commercials for a generalized approach, always seek advice from a legal professional who deals with bankruptcy laws for an excellent approach to your case.