A family member wants to file bankruptcy, How much does it cost and where do you start?

We've heard there is more than one type. If so can someone explain the differences and how they work??? THANKS LISA

It all depends on the lawyer you choose. There are some assistance programs that can help if you are below the poverty level. I'm from Montana and the one here is Montana Legal Service. There is more than 1 type. The options you'd be looking at are Chapter 7 and Chapter 13. The main difference is that with a Chapter 13 you're still obligated to pay back a portion of the debt. You're first step is to contact a lawyer and get either a quote or ask if they know of any programs in your area. With the new bk laws as of '05 you'll need to see a credit counselor to discuss your options. This happens after you see the lawyer and after you file. The main companies that do these are CCCS and MMI. Good luck.

EDIT:
Dave Ramsey's "financial peace" might work for some people but personally I don't like it. He advocates not having a credit score which is simply unrealistic in this day and age. I also think he's a hypocrite. He swears that bankruptcy isn't the answer but he himself has filed!

Start with an attorney. Usually the consultations are free. Good Luck!

If your family member has money problems it isnt a good idea to file bankruptcy...if they are in debt or having money problems...go to www.daveramsey.com
it is a great program

im not sure if theres different types but u gotta get a lawyer. a person i kno had to pay 1000

You will have to pay an attorney fee and a filing fee and paperwork cost, the fees vary from state to state but you will have to consult an attorney to get his rates and he or she will sit down with you and explain the Chapter 7 and Chapter 13 and see which would be the best option for the person wanting to file bankruptcy. Best of luck to your family member.

I 2nd the Dave Ramsey opinion! Filing bankruptcy isnt a smart move. You should pay your debts because you ran them up. It might take a while, but it can be done.

www.daveramsey.com all the way! He knows his stuff!!!

The others in here gave you excellent advice,visit www.daveramsey.com. He went bankrupt, turned his life around and provides incredible guidance on personal finance so he knows what he is talking about. He isn't a fly by night clown, he's been doing this over 20 years. After listening to him for years, his generosity to those struggling is unreal.

Having a family member that declared bankruptcy, I have to advise do everything you can to keep them from doing it. The emotional impact is more then you would think on those that file not to mention the cloud that hangs over them for the next 7 or so years.

I know this isn't what you asked, but anytime I hear someone mention bankruptcy I recommend they exhaust every option before filing.

Best Wishes.

You will need to contact a bankruptcy attorney. The consultation is usually free. To file and complete, it can be between $500-2000, depending on the attorney and bk.

There are two types of personal bankruptcy: A Chapter 7 BK totally wipes away the debt that is included in the BK. You do not make payments. You are not allowed to include your home. The second type is a Ch. 13. With this one, you make payment arrangements and may include your home (but I would not because it can cause even bigger problems--like not getting credit for the payments that you are making through the bankruptcy courts).

Generally, you will want to know how much total debt (and what type you want to file). Nowadays, with the new laws, you will be required to file a Chapter 13, but then can convert it to a chpt. 7. The reason this is done is because of the loss creditors had taken in the past, so now the changes are used to get people to honor their debt as much as they can.

Your maximum income should be under $48,000, but depending on your debtload, the courts may have mercy on you if you make more and have little in the way of assets.

There will be people on here that will tell you to go through Credit Counseling or some type of Debt Management program. DO NOT DO THIS. These programs cost you money and you are still reported as being late. For the hassle you go through, you might as well do a BK and be done with it. Credit Counseling agencies may tell you that this will repair your credit and that it is better than a bankrupcty, but the truth is that many lenders treat credit counseling akin to a bankruptcy.

Good luck.