Types of Bankruptcy. Two types of bankruptcy include chapter 7 bankruptcy and chapter 13 bankruptcy. A lot of people refer to Chapter 7 Bankruptcy as a fresh start bankruptcy, because it pretty much wipes...
A lot of people refer to Chapter 7 Bankruptcy as a fresh start bankruptcy, because it pretty much wipes out most of your debts as opposed to a Chapter 13 Bankruptcy, where you pay back a certain amount to your creditors each month through a trustee. So here we have Mr. Consumer who has gone to a bankruptcy attorney says he wants to file bankruptcy. The attorney he can't file for him until he has undergone this pre-filing briefing through an approved agency. Mr. Consumer will be issued a certificate to take back to the attorney after completing the pre-filing briefing. Before or after the briefing, the attorney has to determine whether Chapter 7 or 13 is best suited for the consumer. It's called the main stance, and it's a complex and fairly rigid look at the consumer's financial situation. That helps the attorney direct the consumer into the proper chapter.
One other thing I will touch on, is that this will require the consumer to pay the full amount owed on his car loan, regardless of the condition of the car, as opposed to paying only what the car was worth under the old law. Also, the attorneys now must certify that their client's financial statements are correct, and that they have received the proper information.
