Costs and Benefits
Difficult economic times are forcing more and more people to consider filing for personal bankruptcy relief in an effort to obtain an “economic fresh start.” Before doing so, however, individuals should be aware of the benefits of a bankruptcy filing, as well as the costs and consequences of such an action.
There is a filing fee for any bankruptcy action as well as costs for taking the required credit counseling and financial management courses. An individual is most likely to incur legal expenses as well. Although self representation or pro se representation is allowed under bankruptcy law, it is highly recommended that an attorney, who practices in this area of the law, be hired. The process is very detailed and somewhat complicated. Mistakes can lead to the unnecessary loss of property or the outright dismissal of the bankruptcy proceeding.
Under current law, a person who files for relief under Chapter 7 (Liquidation) of the Bankruptcy Code may not do so again for a period of eight (8) years. A Chapter 13 Petition (Reorganization), however, can be filed two (2) years after filing a Petition under Chapter 7. In addition, the bankruptcy filing may remain on an individual’s credit history – seven (7) years for a completed Chapter 13 filing and ten (10) years for a Chapter 7 filing.
If you would like more information about filing Bankruptcy in Rhode Island, consult Attorney Henry V. Boezi.