Chapter 13 vs. Chapter 7
Which should you file, chapter 7 or chapter 13? If you can file chapter 7, then go for it. In the long run, chapter 7 is better than chapter 13. With chapter 7, it starts and ends quickly but with chapter 13, it could drag on for 3 to 5 years.
File chapter 13 only if you do not qualify for chapter 13 or if you have arrearages on your home payments and need time to pay off the back payments.
Chapter 13 requires that you pay back your creditors. Which creditors do you pay back and how much do you pay them? That depends on your situation. No two chapter 13s are the same. In some cases you may pay back only a few creditors and in other you may have to pay them all.
The amount that you pay also depends on your situation. If you are filing bankruptcy because you do not qualify to file chapter 7, then you will certainly have to pay unsecured creditors some or all that you owe them. The amount is determined by a bankruptcy formula.
If you are filing chapter 13 simply because you are behind on your home payments or car payments and need time to catch up, you may only have to pay back those secured creditors.
Under the new laws, there is now what is known as the presumptive calculations. This set of calculations determine how long the repayment plan will be and how much money (if any) will go to the unsecured creditors.
The result of the presumptive calculations is a 6 page document with about 70 or more fields of data known as Form B22C.
Performing the calculations requires the brain power of a computer since it relies not just on information under your control, but requires access to complex data that is compiled by no less than the IRS, the Census Bureau, the Department of Health and Human Services and more.
If you were to do it by yourself, just performing these calculations could take you weeks of frustrating nail biting agony.
Fortunately for you, the presumptive calculations are only a paper tiger. It may look fearsome but we reduce it to simply answering a few questions while we do the calculations.
When you hire us, we pass the information that you give us through our presumptive calculations crusher utility. Our utility pulls everything together from every applicable government database and does all the number crushing for you. We use the results of this utility to prepare your bankruptcy forms.
Our online questionnaire was extremely easy to fill out under the old law and under the new law, in spite of the added calculations, it is even easier.
The Bankruptcy Documents
The new bankruptcy law may be a paper tiger but it has created a mountain of horrendous bankruptcy forms. Before you begin to panic, that is our bad news, not yours.
For one, the man-hours needed to put together the 6 page Form B22C document can be compared to that need to prepare two or three complete bankruptcies under the old laws.
On top of that, the new law has caused a typical document set to balloon from about 23 to 35 pages under the old law to about 50 to 75 pages under the new.
In the past, a lot of people hacked away at their own bankruptcies inch by inch, week after week, until it was done, but with the new laws, that is a thing of the past. Now you must have your bankruptcy forms prepared professionally by a full-service company.
Because of the burdens of the new law, many attorneys have doubled their prices just to make it worth their while.
None of this need bother you because we take all the responsibility of preparing the official federal bankruptcy forms on ourselves.
You fill out our 20 minute online questionnaire and we get all of the mountains of the official federal bankruptcy forms done so that all you do is sign your name and file.
It is not a good idea to use an attorney for a chapter 13
If you use an attorney for chapter 13, there is a good chance that your chapter 13 bankruptcy will be canceled by the court.
The reason is that when you file a chapter 13, you are supposed to repay the creditors, but if you hire an attorney, the attorney gets paid their fees first before your creditors get anything. Most creditors such as for your home or auto purchase will not wait for the lawyer to get paid completely and they usually take action to foreclosure on you in the mean time.
Here is how it works. Chapter 13 attorneys hide their real fees in the repayment plan, so while you may only have to give them a small deposit to get started, they will eventually get as much as $5,000 or even more, through the court trustee.
When you file and get the repayment plan approved by the court, your lawyer gets his or her entire $5,000 fee paid to him monthly by the trustee before the trustee turns around to pay your creditors. For most people, this means that your creditors may have to wait as much as a whole year while the lawyer gets paid his money out of the money you give the court trustee.
Since most people drop out of the chapter 13 within the first 12 months, you are likely to have only paid lawyer fees in your chapter 13, and nothing else. If on the other hand we prepare the chapter 13 for you, there is no attorney to get paid first, so all your plan payments go to the creditors.
The Credit Counseling Class
The new bankruptcy law requires that you take a 90 minute Credit Counseling class before filing your bankruptcy, unless there is an urgent matter that makes it necessary for you to file first before taking the class.
Why do we list the Credit Counseling class third instead of first? The class is a perfunctory, not determinative. You cannot fail it since there is no test to take. You just have to listen for an hour and a half as the credit card companies try to talk you out of bankruptcy, using their surrogates, the credit counselors.
It is best to have your documents prepared and ready to file before taking the class because this way, you will know that you qualify before you sit through the class.
Why is there a class in the first place? The credit card companies wrote it into the law so that they can use it as an opportunity to divert you into paying back whay you owe instead of bankruptcy filing.
Do you need to take the class before filing? Not necessarily. The law allows you to file first and then take the class later if you have an urgent situation and need to file quickly.
You can find a list of classes from the government site at Approved Credit Counselors
Do not let the credit counseling class stop you from taking the bankruptcy means test or from having us prepare your bankruptcy forms.
Remember, they want to talk you out of filing bankruptcy.
Take the class after your bankruptcy forms have been prepared and if you have an emergency, file first and take the class later.
Filing, Creditor Meeting and Money Management Education
After we have prepared your bankruptcy forms, you need to file them with the court. It is as simple as turning in the bankruptcy forms that we give you and paying the court filing fee. If you are low income, you do not have to pay the court fee. After ordering, let us know and we will include the bankruptcy forms for waiving the court fees for free.
As we mentioned earlier, you get to propose to the court a repayment plan. If you have not yet filed the plan, you can file it within 15 days of the filing of the bankruptcy petition.
About a month after filing the plan, you will need to attend the mandatory confirmation hearing. The court will confirm the repayment plan or modify it based on creditor input.
Once confirmed, the plan becomes the schedule for repaying the creditors. You repay the creditors through the trustee as laid out in the plan.
The new bankruptcy law requires you to attend another 90 minute class after filing bankruptcy, this one being the education class. You have several months after filing your bankruptcy forms to take the class. This class is to educate you on how to manage your bills so that you do not find yourself bankrupt again.
If you hire us, you will find it to be nothing more than a paper tiger.
In the old days,
It used to be that when you said that you would do something for another person, you were honor bound to keep your word and a simple handshake was all you need to get started.
Yes, a handshake and your word of honor.
These days, everything is doubletalk. When a video rental company says that they have gotten rid of late fees, they have simply renamed the late fee, like say, delayed restocking fee.
When a bank says free checking, they do not mean free use of their ATM or free money orders, or an end to 30 dollar return check charges. When a company promises you a no-cost money to buy a house, they hit you with a setup fee, and a host of other meaningless fees.
And if you think you have asked all the right questions and have gotten the bottom-line, you will find out too late that there is something extra you are being charged for that you didn't think to ask the sales person.
If you are about to file for bankruptcy, you are probably a nervous wreck and you do not need another thing to worry about. You are frazzled enough and you deserve a break. You need our word of honor and you need it straight up.
That is why we will not wow you with flashing neon lights or animated graphics dancing back and forth on our site.
Here is our WORD and HANDSHAKE
This is a list of what we will do for you and it is way more than is needed for a successful bankruptcy.
If it is on this list, you have our word of honor that we will do it.
We have left nothing out, but if you came up with something that is not on the list, we will work harder than anyone else to do it.
Handshake No. 1 - The Documents
We will prepare all of the official Federal bankruptcy forms required by the courts for a chapter 13 bankruptcy. It takes about 65 pages of court forms covering just about everything there is to know about your bills.
These are not templates or forms but completed documents that are ready for the court. All you do is sign your name and turn them in to the court clerk.
The documents include all of the schedules from A to J, and the various mandatory statements.
To summarize, they are:
- Voluntary Petition
- Summary of Schedules
- Schedule A - Real Property
- Schedule B - Personal Property
- Schedule C - Property Claimed As Exempt
- Schedule D - Creditors Holding Secured Claims
- Schedule E - Creditors Holding Unsecured Priority Claims
- Schedule F - Creditors Holding Unsecured Nonpriority Claims
- Schedule G - Executory Contracts and Unexpired Leases
- Schedule H
- Schedule I - Current Income of Individual(s)
- Schedule J- Current Expenditures of Individual(s)
- Declaration Concerning Schedules
- Statement of Affairs
- Form B22C - The Presumptive Calculations Documents
- Statement of Social Security Number
- Creditor Mailing Matrix
- Creditor List Formatted for electronic delivery
- Court Fee Waiver
We also provide on a discretionary and complimentary basis, various other helpful bankruptcy forms not required by the official bankruptcy rules.
Note: We prepare both Chapter 7 and Chapter 13 bankruptcies.
Handshake No. 2 - The Quality Control
Preparing 65 or more pages of detailed legal documents is not an easy task particularly since everything is riding on it. One serious mistake could turn a simple boring process into a nightmare.
This is all the more reason why you are better off having an experienced and trained pair of eyes looking over everything rather than trusting some ordinary bankruptcy software.
When we are done with preparing your bankruptcy forms, we run it through a series of quality control checks.
- First we check the bankruptcy information that you give us for completeness. You would be surprised how easy it is to leave out important information and not be aware of it.
Next we make sure that your belongs such as your house, your cars, your pensions, your life insurance, your furnishings and all of your other possessions are protected by bankruptcy exemptions.
- Then we crunch all of the numbers to make sure that you are truly insolvent, which in other words means that your bankruptcy cannot be denied. When it is all said and done, the trustee looks to see if you cannot pay what you owe considering your income, expenses, size of household, etcetera and that is what our trained eyes and proprietary number cruncher tell us.
Note: All of this happens before we prepare the bankruptcy forms.
- We then prepare all of the bankruptcy forms the way the court wants them. All of the information is presented exactly as required. Every piece of data is placed on the right bankruptcy form, on the right page and in the right space. All the lists in all the schedules are alphabetized as required by the rules and all the numbers match up with each other and conform to what the trustees want.
After we have prepared your complete set of bankruptcy forms, we painstakingly double check all of the critical parts. These are the parts that really matter.
If your car breaks down you can spend days guessing what is wrong, adjusting screws, fiddling with and replacing all sorts of parts, but unless you know for certain what is wrong, you will not be able to fix it.
When you file bankruptcy, the trustee gets a copy of everything and assigns his or her staff to break it all down to the nuts and bolts and at the end of the day, if the trustee does not find what he or she is looking for, you have trouble.
Now, if you are doing it yourself or using bankruptcy software, you and the bankruptcy software will not know what is critical and what is not. Yes, you may save money buying some cheap software but eventually, you will wish you hadn't shortchanged yourself.
At the end of the day, all you really want is to have your discharge and our thoroughness ensures that. This is why we have never had a customer who did not get his or her discharge. And that is why we have the craziest guarantee in the business.
Handshake No. 3 - The Added Value
Handshake No. 3 - The Added Value
In addition to preparing your documents,
- We will accept as many creditors and bill collectors as you have at no extra cost. Bankruptcy lawyers and paralegals charge you extra after the first few creditors and that can get expensive.
- You can take your time giving us your bankruptcy information. The information you submit to us is saved as you enter it, so that you can do it in as many sessions as you need. All you do is log back on and continue where you left off. This means that you do not need to wait till you have all of your bills to get started. Sign up today and take your time gathering your bankruptcy information.
- You can make changes to your information at no extra charge, as often as you like, until our work is finished. After your bankruptcy forms have been completed and delivered to you and even after you have filed, you can still make changes and have us redo everything for a nominal charge.
- If you need to, you can file one joint bankruptcy with your spouse and save on court fees. We will allow you to add your spouse at no extra cost.
- We protect the privacy of your bankruptcy information. We never share your information with anyone. You will never get on a mailing list or get unwanted email from us.
- When you are done giving us your bankruptcy information, we will prepare your documents in one business day. In fact most people get back their completed bankruptcy forms in a few hours, but we say one business day so as to make sure our word is good no matter what the situation is.
- After you sign up, we give you free access to our credit information resources that you can use on your own down the road, to restore your standing with the bureaus. We will even put you in touch with attorneys who will take the bankruptcy off your bureau profile as though you never even filed. Who wants to wait the usual 10 years? Hire us and the credit attorneys can make it as if it never happened. That is just the icing on the cake.
Handshake No. 4 - The Support
We would like to tell you that our bankruptcy forms work better for you in court than that of everyone else but we will not, because we do not know how good the full-service documents of other outfits are.
We can say though that we offer the best overall customer satisfaction.
There are several reasons for this. First our people are more than just customer service reps. Each one of them has logged many years prior the advent of the Internet, preparing bankruptcy documents by hand and dealing with the bankruptcy courts.
When you contact them with a question, they give you the correct answer with uttermost certainty and authority rather than give you an educated guess.
Our second advantage is that we only handle personal bankruptcies and even more specifically, only chapter 7s and 13s.
Most important of all, even though we have done tens of thousands of bankruptcies, we are not the biggest company and you are not just a number to us. This means that we can take our time getting your bankruptcy filing right rather than rushing through it.
When it comes to hands-on full-service bankruptcy preparation, bigger does not mean better. We are big enough to have handled thousands of every type of bankruptcy case and small enough to care about you as an individual. This allows us to pay close attention to each individual customer and to get it right every single time.
Our handshake and word of honor is that we will be there to help you every single step of the way. If you have a special situation and need us to bend to accommodate you, we are more likely to do so than the other companies.
Handshake No. 5 - The Guarantee
We guarantee that the bankruptcy forms that we prepare will be accepted by the court for filing or we will fix it or return all of the money you paid us.
Full Service versus Do It Yourself
We are often asked by people why they should use us rather than to use online software.
Our answer is that you can find out for yourself how we campare by visiting the
Online Bankruptcy Reviews
site and see what others have said about us.
The Online Bankruptcy Reviews site is a top review site for consumer bankruptcy preparers.
There is also the popular
Online Bankruptcy Reviews
site where you can see all the other bankruptcy sites compared side by side.
You may know a thing or two about electricity but when it comes to rewiring your entire house, wouldn't you want to have it done for you by a professional rather than to be handed a box full of electrical tools and told to call a toll free number if you need help?
That is exactly what happens when you do it yourself with software, whether it is online or with one of those executables programs that you download and install permanently on your hard drive.
As we said earlier, all consumer bankruptcy software are not real software but rather, repackaged blank forms marketed as bankruptcy software.
Bankruptcy kits and software evoke the memory of one genre of movies called airplane disaster movies. In these movies, the pilot is either dead or unconscious and the jumbo jet is being flown by a passenger.
The reluctant passenger-turned-pilot is guided by a pilot on the ground via a hand held radio, into landing the massive plane before the fuel runs out.
That makes for exciting nail-biting movies but not for good bankruptcies. The best bankruptcy experience is a dull and boring one and that is what you can expect from us.
We will not give you a software tool and ask you to do it yourself. We will do it for you. And when you appear for your mandatory trustee meeting, it will be boring and uneventful because the documents will be done right.
Talking about doubletalk, some bankruptcy sites leave you unsure as to who is preparing the bankruptcy, you or them. Here is how to find out. Search their web page for the words software or technology. (It is as simple as doing a Ctrl-F on their web page to bring up the search dialog box.)
If the words download, software or technology describe what they do, then you know that it is do-it-yourself with software, but if they say full-Service or we will do it for you then that is what you want.
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If you have not already done so, visit the
Online Bankruptcy Reviews
site and see how we compare to attorneys and to the other bankruptcy companies.