Online Bankruptcy Service Versus a Bankruptcy Attorney


With the economy still showing no signs of improvement, many people are struggling financially with enormous debt that is spiraling out of control and many more are in the process of losing their home to foreclosure. Filing bankruptcy can offer individuals in distress a way out and a fresh start. Eliminating or paying off debt under the protection of the bankruptcy law is what the government intended when they created bankruptcy.

Some individuals looking into filing bankruptcy try to figure out ways to save money in the bankruptcy process. This is understandable considering huge debt and a lack of cash is the individual's biggest concern and the reason for filing bankruptcy to begin with. As a way to cut corners, many debtors look into using a bankruptcy service instead if hiring a bankruptcy attorney. There are many online bankruptcy services out there now that can provide help with filing bankruptcy for the average debtor. How they generally work is that they have the debtor pay for the service first. Some offer a general means test through a questionnaire to see if the individual will qualify to file bankruptcy where others do not. The service then provides online forms for the debtor to fill out where they must submit all of their financial information, income, expenses, a complete list of all of their creditors and addresses, and a detailed list of all property and assets including a monetary valuation of the debtor's property and assets. This list of assets means ALL assets including all household items such as electronics, jewelry, clothes, art, appliances, etc. Once the online forms are completed the debtor submits them to the service for them to prepare the petition. The completed bankruptcy petition is then mailed or emailed to the debtor who can then file the paperwork with the bankruptcy court.

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It all sounds pretty simple and straight forward, however, there have been changes made to the bankruptcy code back in 2005 that has made bankruptcy more complicated. Bankruptcy services or even a paralegal cannot give ANY legal advice whatsoever to the individual filling out the bankruptcy petition. They are not allowed to tell the debtor which bankruptcy exemption laws to use even if they know which ones are correct for the debtor and the state they reside in. When a bankruptcy service prepares the petition they can only plug in the information given by the debtor in the appropriate spot on the form. They cannot evaluate any information or give any kind of advice or they may face charges from the bankruptcy court and the Department of Justice. At the time of filing the bankruptcy petition with the court, the debtor must also supply the court with copies of financial information including several months of pay stubs, bank statements and tax returns. The debtor will also have to complete pre and post bankruptcy counseling courses and submit the course completion certificates to the court. The debtor must be prepared to attend the creditors meeting and answer questions regarding their bankruptcy and petition preparation from the bankruptcy trustee. If anything is not in order or correct the case may be dismissed without a discharge leaving the debtor high and dry.

The bottom line is, let the buyer beware. After all if an individual considers the amount of debt that they are discharging in their bankruptcy then paying for an experienced bankruptcy attorney is really very minimal. Especially when it comes to having peace of mind that their bankruptcy case will be handled professionally and go smoothly, with the end result being the debtor emerges debt free or close to it.


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