“When you go bankrupt certain duties and obligations are placed upon you by law. This includes things such as delivering up an inventory of your estate, disclosing income increases during your bankruptcy and providing business accounts for the previous three years. You will be subject to the bankruptcy restrictions and you will also suffer from other implications. You will also be investigated by the Official Receiver unless it is deemed unnecessary, though it is rare not to be. All of your assets that are not exempt from the bankruptcy estate will come under the control of the trustee. They may have to be sold.”
A number of cash-strapped Americans, overloaded with debt, will not be able to afford to file for bankruptcy this year. Anywhere between 200,000 and 1 million consumers are estimated to be unable to front the $1,500 average cost to pay for the filing and lawyer fees for a Chapter 7 bankruptcy protection, according to recent research submitted to the National Bureau of Economic Research.
Chapter 7, the most common form of consumer bankruptcy in the United States, wasn’t always this hard to attain. With Chapter 7 bankruptcy, your assets that are non-exempt are turned over to a trustee, who then allocates funds to your creditors, in turn wiping out all or most of your debts. But bankruptcy laws changed in 2005, resulting in bankruptcy filings becoming more expensive and more difficult to execute. The United States Government Accountability Office estimated that the average attorney fee for a Chapter 7 case increased from $712 in February and March 2005 to $1,078 in February and March 2007, a 51 percent increase.