A good way to approach the decision of whether to hire a lawyer is to buy (and read) Nolo's book How to File for Chapter 7 Bankruptcy. It will give you a good idea of what issues may arise when you file, and flags specific situations when a lawyer's help is called for. It will also give you a good idea of whether the filing process seems to complicated for you.
In 2004, the number of insolvencies reached record highs in many European countries. In France, company insolvencies rose by more than 4%, in Austria by more than 10%, and in Greece by more than 20%. The increase in the number of insolvencies, however, does not indicate the total financial impact of insolvencies in each country because there is no indication of the size of each case. An increase in the number of bankruptcy cases does not necessarily entail an increase in bad debt write-off rates for the economy as a whole.

All bankruptcy cases in the United States are handled through federal courts. Any decisions over federal bankruptcy cases are made by a bankruptcy judge, including whether a debtor is eligible to file or whether he should be discharged of his debts. Administration over bankruptcy cases is often handled by a trustee, an officer appointed by the United States Trustee Program of the Department of Justice, to represent the debtor's estate in the proceeding. There is usually very little direct contact between the debtor and the judge unless there is some objection made in the case by a creditor.


Bankruptcy in the United States is a matter placed under federal jurisdiction by the United States Constitution (in Article 1, Section 8, Clause 4), which empowers Congress to enact "uniform Laws on the subject of Bankruptcies throughout the United States". Congress has enacted statutes governing bankruptcy, primarily in the form of the Bankruptcy Code, located at Title 11 of the United States Code.[33]
A consumer proposal can only be made by a debtor with debts to a maximum of $250,000 (not including the mortgage on their principal residence). If debts are greater than $250,000, the proposal must be filed under Division 1 of Part III of the Bankruptcy and Insolvency Act. An Administrator is required in the Consumer Proposal, and a Trustee in the Division I Proposal (these are virtually the same although the terms are not interchangeable). A Proposal Administrator is almost always a licensed trustee in bankruptcy, although the Superintendent of Bankruptcy may appoint other people to serve as administrators.
In Chapter 7, a debtor surrenders non-exempt property to a bankruptcy trustee, who then liquidates the property and distributes the proceeds to the debtor's unsecured creditors. In exchange, the debtor is entitled to a discharge of some debt. However, the debtor is not granted a discharge if guilty of certain types of inappropriate behavior (e.g., concealing records relating to financial condition) and certain debts (e.g., spousal and child support and most student loans). Some taxes are not discharged even though the debtor is generally discharged from debt. Many individuals in financial distress own only exempt property (e.g., clothes, household goods, an older car, or the tools of their trade or profession) and do not have to surrender any property to the trustee.[43] The amount of property that a debtor may exempt varies from state to state (as noted above, Virginia and Maryland have a $1,000 difference.) Chapter 7 relief is available only once in any eight-year period. Generally, the rights of secured creditors to their collateral continues, even though their debt is discharged. For example, absent some arrangement by a debtor to surrender a car or "reaffirm" a debt, the creditor with a security interest in the debtor's car may repossess the car even if the debt to the creditor is discharged.

The alternatives to hiring a bankruptcy lawyer are scary. Although you should be careful of attorneys fees, your goal should never be to do a cheap bankruptcy. A cheap bankruptcy would consist of you either filing for bankruptcy alone, or hiring a “document preparation” company. Filing bankruptcy alone is not an option. A typical bankruptcy petition is over 50 pages long and requires intimate knowledge of the Federal Bankruptcy Code. You may apply an exemption erroneously and may possibly lose property that could have been protected.

The thinking behind this is that the bankruptcy code was set up to give people a second chance, not to punish them. If some combination of mortgage debt, credit card debt, medical bills and student loans has devastated you financially and you don’t see that picture changing, bankruptcy might be the best answer. If you don't qualify for bankruptcy, there is still hope.
In Chapter 11 bankruptcy, the debtor retains ownership and control of assets and is re-termed a debtor in possession (DIP).[50] The debtor in possession runs the day-to-day operations of the business while creditors and the debtor work with the Bankruptcy Court in order to negotiate and complete a plan. Upon meeting certain requirements (e.g., fairness among creditors, priority of certain creditors) creditors are permitted to vote on the proposed plan.[51] If a plan is confirmed, the debtor continues to operate and pay debts under the terms of the confirmed plan. If a specified majority of creditors do not vote to confirm a plan, additional requirements may be imposed by the court in order to confirm the plan. Debtors filing for Chapter 11 protection a second time are known informally as "Chapter 22" filers.[52]
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In 2011, the Superintendent of bankruptcy reported that trustees in Canada filed 127,774 insolvent estates. Consumer estates were the vast majority, with 122 999 estates.[26] The consumer portion of the 2011 volume is divided into 77,993 bankruptcies and 45,006 consumer proposals. This represented a reduction of 8.9% from 2010. Commercial estates filed by Canadian trustees in 2011 4,775 estates, 3,643 bankruptcies and 1,132 Division 1 proposals.[27] This represents a reduction of 8.6% over 2010. 

When the debtor completes payments pursuant to the terms of the plan, the court formally grant the debtor a discharge of the debts provided for in the plan.[54] However, if the debtor fails to make the agreed upon payments or fails to seek or gain court approval of a modified plan, a bankruptcy court will normally dismiss the case on the motion of the trustee.[57] After a dismissal, creditors may resume pursuit of state law remedies to recover the unpaid debt.
Chapter 15: Chapter 15 applies to cross-border insolvency cases, in which the debtor has assets and debts both in the United States and in another country. This chapter was added to the bankruptcy code in 2005 as part of the Bankruptcy Abuse Prevention and Consumer Protection Act. Chapter 15 cases start as insolvency cases in a foreign country and make their way to the U.S. Courts to try and protect financially troubled businesses from going under. The U.S. courts limit their scope of power in the case to only the assets or persons that are in the United States.
In Spain, it is not economically profitable to open insolvency/bankruptcy proceedings against certain types of businesses, and therefore the number of insolvencies is quite low. For comparison: In France, more than 40,000 insolvency proceedings were opened in 2004, but under 600 were opened in Spain. At the same time the average bad debt write-off rate in France was 1.3% compared to Spain with 2.6%.
After the bankruptcy is annulled or the bankrupt has been automatically discharged, the bankrupt's credit report status is shown as "discharged bankrupt" for some years. The maximum number of years this information can be held is subject to the retention limits under the Privacy Act. How long such information is on a credit report may be shorter, depending on the issuing company, but the report must cease to record that information based on the criteria in the Privacy Act.
Bankruptcy filings in the United States fall under one of several chapters of the Bankruptcy Code: Chapter 7, which involves liquidation of assets; Chapter 11, which deals with company or individual reorganizations, and Chapter 13, which is debt repayment with lowered debt covenants or specific payment plans. Bankruptcy filing specifications vary among states, leading to higher or lower filing fees depending on how easily a person or company can complete the process.

Your lawyer will probably have you fill in a questionnaire about your property, debts, expenses and income. A good lawyer will be able to determine quickly what kinds of debts will be dischargeable in bankruptcy. The lawyer should advise you to get credit counseling before you file, and will may even have a computer terminal in their office where you can do the counseling right there, online. Many lawyers have preferred credit counselors that they work with.
A Bankruptcy Trustee (in most cases, the Official Receiver) is appointed to deal with all matters regarding the administration of the bankrupt estate. The Trustee's job includes notifying creditors of the estate and dealing with creditor inquiries; ensuring that the bankrupt complies with their obligations under the Bankruptcy Act; investigating the bankrupt's financial affairs; realising funds to which the estate is entitled under the Bankruptcy Act and distributing dividends to creditors if sufficient funds become available.

Following the soar in insolvencies in the last decade, a number of European countries, such as France, Germany, Spain and Italy, began to revamp their bankruptcy laws in 2013. They modelled these new laws after the image of Chapter 11 of the U.S. Bankruptcy Code. Currently, the majority of insolvency cases have ended in liquidation in Europe rather than the businesses surviving the crisis. These new law models are meant to change this; lawmakers are hoping to turn bankruptcy into a chance for restructuring rather than a death sentence for the companies.[58]
At MacLean Chung Law Firm, our Bankruptcy Lawyers understand that paying for a bankruptcy lawyer is not easy. If you are contemplating bankruptcy, it’s likely that you do not have thousands of dollars to pay a bankruptcy attorney. That is why we have affordable low cost bankruptcy fees for those that qualify. A Chapter 7 bankruptcy starts at $925.00 for attorney’s fees and we have one of the lowest upfront fees for Chapter 13 bankruptcy.
In Canada, bankruptcy always means liquidation. There is no way for a company to emerge from bankruptcy after restructuring, as is the case in the United States with a Chapter 11 bankruptcy filing. Canada does, however, have laws that allow for businesses to restructure and emerge later with a smaller debtload and a more positive financial future. While not technically a form of bankruptcy, businesses with $5M or more in debt may make use of the Companies Creditors' Arrangement Act to halt all debt recovery efforts against the company while they formulate a plan to restructure.
After meeting with a bankruptcy lawyer, you can expect to feel a great sense of relief (it’s wonderful knowing that a solution is in sight) and want to get the process started. Many people who don’t have the funds turn to friends and family—and sometimes even employers—and find most understanding when it comes to a request for help with bankruptcy fees. It’s likely because it’s cheaper to help someone fix a financial problem once and for all, rather than to help out on an ongoing basis.

If you're trying to figure out if you should file, your credit is probably already damaged. A Chapter 7 filing will stay on your credit report for ten years, while a Chapter 13 will remain there for seven. Any creditors you solicit for debt (a loan, credit card, line of credit, or mortgage) will see the discharge on your report, which will prevent you from getting any credit. 

Bankruptcy filings in the United States fall under one of several chapters of the Bankruptcy Code: Chapter 7, which involves liquidation of assets; Chapter 11, which deals with company or individual reorganizations, and Chapter 13, which is debt repayment with lowered debt covenants or specific payment plans. Bankruptcy filing specifications vary among states, leading to higher or lower filing fees depending on how easily a person or company can complete the process.
The formal bankruptcy process is rarely carried out for individuals.[30] Creditors can claim money through the Enforcement Administration anyway, and creditors do not usually benefit from the bankruptcy of individuals because there are costs of a bankruptcy manager which has priority. Unpaid debts remain after bankruptcy for individuals. People who are deeply in debt can obtain a debt arrangement procedure (Swedish: skuldsanering). On application, they obtain a payment plan under which they pay as much as they can for five years, and then all remaining debts are cancelled. Debts that derive from a ban on business operations (issued by court, commonly for tax fraud or fraudulent business practices) or owed to a crime victim as compensation for damages, are exempted from this—and, as before this process was introduced in 2006, remain lifelong.[31] Debts that have not been claimed during a 3-10 year period are cancelled. Often crime victims stop their claims after a few years since criminals often do not have job incomes and might be hard to locate, while banks make sure their claims are not cancelled. The most common reasons for personal insolvency in Sweden are illness, unemployment, divorce or company bankruptcy. 

In Canada, bankruptcy always means liquidation. There is no way for a company to emerge from bankruptcy after restructuring, as is the case in the United States with a Chapter 11 bankruptcy filing. Canada does, however, have laws that allow for businesses to restructure and emerge later with a smaller debtload and a more positive financial future. While not technically a form of bankruptcy, businesses with $5M or more in debt may make use of the Companies Creditors' Arrangement Act to halt all debt recovery efforts against the company while they formulate a plan to restructure.
After the bankruptcy is annulled or the bankrupt has been automatically discharged, the bankrupt's credit report status is shown as "discharged bankrupt" for some years. The maximum number of years this information can be held is subject to the retention limits under the Privacy Act. How long such information is on a credit report may be shorter, depending on the issuing company, but the report must cease to record that information based on the criteria in the Privacy Act.
The alternatives to hiring a bankruptcy lawyer are scary. Although you should be careful of attorneys fees, your goal should never be to do a cheap bankruptcy. A cheap bankruptcy would consist of you either filing for bankruptcy alone, or hiring a “document preparation” company. Filing bankruptcy alone is not an option. A typical bankruptcy petition is over 50 pages long and requires intimate knowledge of the Federal Bankruptcy Code. You may apply an exemption erroneously and may possibly lose property that could have been protected.
There are two alternative systems that can be used to "exempt" property from a bankruptcy estate, federal exemptions[38] (available in some states but not all), and state exemptions (which vary widely between states). For example, Maryland and Virginia, which are adjoining states, have different personal exemption amounts that cannot be seized for payment of debts. This amount is the first $6,000 in property or cash in Maryland,[39] but normally only the first $5,000 in Virginia.[40] State law therefore plays a major role in many bankruptcy cases, such that there may be significant differences in the outcome of a bankruptcy case depending upon the state in which it is filed.
It is important to understand that while bankruptcy is a chance to start over, it definitely affects your credit and future ability to use money. It may prevent or delay foreclosure on a home and repossession of a car and it can also stop wage garnishment and other legal actions creditors use to collect debts, but in the end, there is a price to pay.
The thinking behind this is that the bankruptcy code was set up to give people a second chance, not to punish them. If some combination of mortgage debt, credit card debt, medical bills and student loans has devastated you financially and you don’t see that picture changing, bankruptcy might be the best answer. If you don't qualify for bankruptcy, there is still hope.
Median income is set by the US Trustee and determined based on household size. In Florida, as of May 1, 2018 median income is as follows: Household of 1 -- $48,000; Household of 2 -- $58,960; Household of 3 -- $65,278; Household of 4 -- $76,953; Household of 5 -- $85,353; Household of 6 -- $93,753; Household of 7 -- $102,153; Household of 8 -- $110,553; Household of 9 -- $118,953; Household of 10 -- $127,353. Source: https://www.justice.gov/ust/means-testing
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To be eligible to file a consumer bankruptcy under Chapter 7, a debtor must qualify under a statutory "means test".[49] The means test was intended to make it more difficult for a significant number of financially distressed individual debtors whose debts are primarily consumer debts to qualify for relief under Chapter 7 of the Bankruptcy Code. The "means test" is employed in cases where an individual with primarily consumer debts has more than the average annual income for a household of equivalent size, computed over a 180-day period prior to filing. If the individual must "take" the "means test", their average monthly income over this 180-day period is reduced by a series of allowances for living expenses and secured debt payments in a very complex calculation that may or may not accurately reflect that individual's actual monthly budget. If the results of the means test show no disposable income (or in some cases a very small amount) then the individual qualifies for Chapter 7 relief. An individual who fails the means test will have their Chapter 7 case dismissed, or may have to convert the case to a Chapter 13 bankruptcy.

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Some examples of this are when a Korean state bankrupted Imperial China causing its destruction, or more specifically, when Chang'an's (Sui Dynasty) war with Pyongyang (Goguryeo) in 614 A.D. ended in the former's disintegration within 4 years, although the latter also seemingly entered into decline and fell some 56 years later.[59] Another example is when the United States, with heavy financial backing from its allies (creditors), bankrupted the Soviet Union which led to the latter's demise.[60]

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it seven years ago, helping birth Debt.org into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering college and professional sports, which are the fantasy worlds of finance. His work has been published by the Associated Press, New York Times, Washington Post, Chicago Tribune, Sports Illustrated and Sporting News, among others. His interest in sports has waned some, but his interest in never reaching for his wallet is as passionate as ever. Bill can be reached at [email protected]
Your lawyer will probably have you fill in a questionnaire about your property, debts, expenses and income. A good lawyer will be able to determine quickly what kinds of debts will be dischargeable in bankruptcy. The lawyer should advise you to get credit counseling before you file, and will may even have a computer terminal in their office where you can do the counseling right there, online. Many lawyers have preferred credit counselors that they work with.
Bankruptcy statistics are also a trailing indicator. There is a time delay between financial difficulties and bankruptcy. In most cases, several months or even years pass between the financial problems and the start of bankruptcy proceedings. Legal, tax, and cultural issues may further distort bankruptcy figures, especially when comparing on an international basis. Two examples:
How to File for Chapter 7 Bankruptcy provides clear, user-friendly information and all the forms you need to get through the entire bankruptcy process. The book and the local resources you'll find on LegalConsumer.com are a perfect combination. The book is designed to work with LegalConsumer.com's means test calculator and lists of Pennsylvania exemption laws, which determine what property you'd get to keep in bankruptcy.
How to File for Chapter 7 Bankruptcy provides clear, user-friendly information and all the forms you need to get through the entire bankruptcy process. The book and the local resources you'll find on LegalConsumer.com are a perfect combination. The book is designed to work with LegalConsumer.com's means test calculator and lists of Pennsylvania exemption laws, which determine what property you'd get to keep in bankruptcy.
A trustee in bankruptcy must be either an Official Receiver (a civil servant) or a licensed insolvency practitioner. Current law in England and Wales derives in large part from the Insolvency Act 1986. Following the introduction of the Enterprise Act 2002, a UK bankruptcy now normally last no longer than 12 months, and may be less if the Official Receiver files in court a certificate that investigations are complete. It was expected that the UK Government's liberalization of the UK bankruptcy regime would increase the number of bankruptcy cases; initially, cases increased, as the Insolvency Service statistics appear to bear out. Since 2009, the introduction of the Debt Relief Order has resulted in a dramatic fall in bankruptcies, the latest estimates for year 2014/15 being significantly less than 30,000 cases.
Relief under Chapter 13 is available only to individuals with regular income whose debts do not exceed prescribed limits.[55] If the debtor is an individual or a sole proprietor, the debtor is allowed to file for a Chapter 13 bankruptcy to repay all or part of the debts. Secured creditors may be entitled to greater payment than unsecured creditors.[53]

Bankruptcy in the United Kingdom (in a strict legal sense) relates only to individuals (including sole proprietors) and partnerships. Companies and other corporations enter into differently named legal insolvency procedures: liquidation and administration (administration order and administrative receivership). However, the term 'bankruptcy' is often used when referring to companies in the media and in general conversation. Bankruptcy in Scotland is referred to as sequestration. To apply for bankruptcy in Scotland, an individual must have more than £1,500 of debt.
Financially distressed municipalities, including cities, towns, villages, counties, and school districts, may file for bankruptcy under Chapter 9. Under Chapter 9, there is no liquidation of assets to repay the municipality's debts. Chapter 12 bankruptcy provides relief to "family farmers" or "family fishermen" with regular annual income. Both Chapters 9 and 12 make use of an extended debt repayment plan. Chapter 15 was added in 2005 to deal with cross-border cases which involve debtors, assets, creditors and other parties who may be in more than one country. This type of petition is usually filed in the debtor's home country.
Following the soar in insolvencies in the last decade, a number of European countries, such as France, Germany, Spain and Italy, began to revamp their bankruptcy laws in 2013. They modelled these new laws after the image of Chapter 11 of the U.S. Bankruptcy Code. Currently, the majority of insolvency cases have ended in liquidation in Europe rather than the businesses surviving the crisis. These new law models are meant to change this; lawmakers are hoping to turn bankruptcy into a chance for restructuring rather than a death sentence for the companies.[58]
Chapter 11:This is designed for businesses. Chapter 11 is often referred to as “reorganization bankruptcy” because it gives businesses a chance to stay open while they restructure the business’ debts and assets so it can pay back creditors. This is used primarily by large corporations like General Motors, Circuit City and United Airlines, but can be used by any size business, including partnerships and in some rare cases, individuals. Though the business continues to operate during bankruptcy proceedings, most of the decisions are made with permission from the courts.

Chapter 7 means the court sells all your assets—with some exemptions—so you can pay back as much debt as possible. The remaining unpaid debt is erased. You could lose your home (or the equity you’ve put into it) and your car in the process, depending on what the court decides. You can only file Chapter 7 bankruptcy if the court decides your income is too low to pay back your debt. This type of bankruptcy stays on your credit report for 10 years.


It can be hard to admit you need help getting out of debt, or that you can't do it alone. But that's why our government has bankruptcy laws to protect not only the creditors, but you! If you have a nerve-racking debt-load, it may be time to face financial facts. Perhaps you've been trying to ignore the ringing phone and the pile of unpaid bills that won't go away.
If you're trying to figure out if you should file, your credit is probably already damaged. A Chapter 7 filing will stay on your credit report for ten years, while a Chapter 13 will remain there for seven. Any creditors you solicit for debt (a loan, credit card, line of credit, or mortgage) will see the discharge on your report, which will prevent you from getting any credit.
Bankruptcy filings in the United States fall under one of several chapters of the Bankruptcy Code: Chapter 7, which involves liquidation of assets; Chapter 11, which deals with company or individual reorganizations, and Chapter 13, which is debt repayment with lowered debt covenants or specific payment plans. Bankruptcy filing specifications vary among states, leading to higher or lower filing fees depending on how easily a person or company can complete the process.
How to File for Chapter 7 Bankruptcy provides clear, user-friendly information and all the forms you need to get through the entire bankruptcy process. The book and the local resources you'll find on LegalConsumer.com are a perfect combination. The book is designed to work with LegalConsumer.com's means test calculator and lists of Pennsylvania exemption laws, which determine what property you'd get to keep in bankruptcy.
Federal Law No. 127-FZ "On Insolvency (Bankruptcy)" dated 26 October 2002 (as amended) (the "Bankruptcy Act"), replacing the previous law in 1998, to better address the above problems and a broader failure of the action. Russian insolvency law is intended for a wide range of borrowers: individuals and companies of all sizes, with the exception of state-owned enterprises, government agencies, political parties and religious organizations. There are also special rules for insurance companies, professional participants of the securities market, agricultural organizations and other special laws for financial institutions and companies in the natural monopolies in the energy industry. Federal Law No. 40-FZ "On Insolvency (Bankruptcy)" dated 25 February 1999 (as amended) (the "Insolvency Law of Credit Institutions") contains special provisions in relation to the opening of insolvency proceedings in relation to the credit company. Insolvency Provisions Act, credit organizations used in conjunction with the provisions of the Bankruptcy Act. 

Some examples of this are when a Korean state bankrupted Imperial China causing its destruction, or more specifically, when Chang'an's (Sui Dynasty) war with Pyongyang (Goguryeo) in 614 A.D. ended in the former's disintegration within 4 years, although the latter also seemingly entered into decline and fell some 56 years later.[59] Another example is when the United States, with heavy financial backing from its allies (creditors), bankrupted the Soviet Union which led to the latter's demise.[60]
It is important to understand that while bankruptcy is a chance to start over, it definitely affects your credit and future ability to use money. It may prevent or delay foreclosure on a home and repossession of a car and it can also stop wage garnishment and other legal actions creditors use to collect debts, but in the end, there is a price to pay.

The alternatives to hiring a bankruptcy lawyer are scary. Although you should be careful of attorneys fees, your goal should never be to do a cheap bankruptcy. A cheap bankruptcy would consist of you either filing for bankruptcy alone, or hiring a “document preparation” company. Filing bankruptcy alone is not an option. A typical bankruptcy petition is over 50 pages long and requires intimate knowledge of the Federal Bankruptcy Code. You may apply an exemption erroneously and may possibly lose property that could have been protected.
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