What about cost? - Currently the filing fee for a Chapter 7 case is $299.00 and a Chapter 13 is $274.00. The filing fee can be paid to the Court in installments or waived entirely as ordered by the Court under certain circumstances.   Attorneys fees are always a consideration, but beware of advertisements of low fees by attorneys or paralegal firms.  Generally, you get what you pay for and good representation is always a must.  Ask yourself, "Would I represent myself before the IRS?"  We all know the horror stories of a tax audit.  The bankruptcy process is at least as serious as that.  Don't take chances!

Can I hide my property from my creditors? - Much of your assets are always protected from creditors.  There are both state and federal laws which protect certain items you own from seizure.   A good example would be retirement accounts such as pensions, IRAs, or 401Ks.  These funds are 'exempt', which means that no creditor may take them.  Household goods are another example, provided you don't have anything extravagant such as a Picasso painting or gold-plated faucets.  You cannot simply 'give' your non-protected assets to others solely to place them beyond the reach of creditors.  You may not defraud the Bankruptcy Court or your creditors; these acts carry serious penalties.  Failure to be completely honest with the Bankruptcy Court can result in criminal charges providing for jail time (up to 5 years) and fines (up to $250,000.00).   However, it is likely that that most of your property would be covered by one exemption or another.

Will I lose my home? ­ Unlike the image of bankruptcy from the 1930's, the current system is not designed to take everything away from you.  You will not be living on the street wearing a barrel.  Under Federal law, an individual is allowed to keep at least $18,450.00 in equity in his or her residence.  This is measured by taking the fair market value of the home and subtracting the balances of all outstanding mortgages.   Under Connecticut law beginning in October 1993, this amount is increased to $75,000.00 per owner.  These amounts are doubled in the case of a couple owning property together.