Online Bankruptcy Site Reviews
By: Lisa Brownstein
The Role of Bankruptcy Web Sites
Online bankruptcy preparation web sites provide a much needed solution to the problem of filing bankruptcy when a person cannot afford high lawyer fees. Many people delay bankruptcy filing because they are too broke to afford a bankruptcy lawyer. It is an oxymoron similar to saying that a person is too tired to sleep or too hungry to eat, but unfortunately it is no laughing matter.
When this country was founded the framers of the constitution made certain to include in it, the right to free oneself from oppressive debt through bankruptcy. They had left a Europe where wealthy landowners often sent debtors to "debtor's prison" and so they sought to abolish that inhumane practice by enshrining the right to file bankruptcy in the constitution. They knew that if it was not put into the constitution, the wealthy ruling class would eventually return to mistreating debtors.
They were right! In spite of the constitutional provision for bankruptcy, every few years wealthy lawmakers try to restrict access to bankruptcy protection and to water it down altogether. They do this not only by direct legislation to weaken bankruptcy laws but by deliberately complicating the process.
To make a bad situation worse, lawyers take advantage of the situation created by the lawmakers, by charging increasingly higher fees. Lawyer fees are now so high that the average debtor cannot afford one and has no choice but to find an affordable alternative.
Bankruptcy preparation web sites provide the much needed alternative and serve a very good purpose. Unlike other areas of law, consumer chapter 7 and 13 bankruptcy filing is an area in which bankruptcy preparation web sites can do as good a job as a bankruptcy lawyers.
In some ways, filing bankruptcy with the help of a bankruptcy web site can be better not only from a cost point of view but because lawyers are constrained to operate in a narrow framework whereas non-lawyers are not. This means that must bankruptcy lawyers will not prepare anything other than a standard bankruptcy for fear of bucking the system. This is why bankruptcy lawyers do not offer the average debtor any insider knowledge that can help them maximize the effectiveness of their bankruptcies.
Non-lawyer bankruptcy preparers do not have this constraint so they are free to offer enhancements to the basic bankruptcy filing. Some of these enhancements include information on preplan a bankruptcy filing to make it easy to be removed from the credit report within a year or so after the discharge. While these techniques are legitimate, lawyers do not like to be liable to their clients any longer than is absolutely necessary. The end result is that they give most debtors what amounts to the same result as a do-it-your-self bankruptcy, without the benefit of their vast experience and training. Why tell a client how they can keep more automobiles than the exemptions allow if the lawyer is not going to get paid any more? That is the problem. So, if a debtor hires a bankruptcy lawyer, he will only be able to keep the standard one car or two, and their bankruptcy will stay on their credit record for the full 10 years.
Another thing that makes some of the bankruptcy web sites that we have reviewed better choices than many bankruptcy lawyers is that they can also put debtors in touch with bankruptcy lawyers who will answer their questions for free just in case they need legal advice. The debtor wins in that he or she gets to pay very little for the bankruptcy and also gets their legal questions answered for free. This is a compelling reason to go with a bankruptcy preparation web site. American Bankruptcy Company and Managed Bankruptcy as well as US Chapter 7 Bankruptcy are bankruptcy preparers that provide customers access to attorneys for free legal advice.
Our Recommended Bankruptcy Sites
American Bankruptcy Company and Managed Bankruptcy are our two top picks. They are just about evenly matched and both of them have earned the right to be ranked numero one. In previous years they have alternated between position #1 and #2 and this year they both have a perfect score of 10, which is the highest we offer. We have awarded the Gold Award to Managed Bankruptcy largely because we cannot give the top honors to more than one company and also because Managed Bankruptcy is marketed largely by word-of-mouth referrals. It comes down to personal preference.
Other Bankruptcy Review Sites
For detailed reviews of bankruptcy sites you can visit these review sites. They feature not only bankruptcy reviews but also detailed articles on the subject of filing bankruptcy.
Types of Bankruptcy Sites
Not all bankruptcy web sites are of the same type. There are the full-service bankruptcy preparation web sites which compete directly with bankruptcy lawyers. There are advertisement web sites which operate solely to refer visitors to bankruptcy lawyers. The attorney referral web sites create the impression that they are operated by lawyers but they function to carry the advertisement of bankruptcy lawyers. And then there are other types of bankruptcy web sites such as online bankruptcy software sites, bankruptcy kit sites and bankruptcy forms web sites.,
Attorney referral web sites
Bankruptcy attorney referral web sites are sites that carry the advertisement of bankruptcy lawyers. These sites create the impression that they are owned and operated by the bankruptcy attorneys but they are not. On those sites, the full web page is devoted to one bankruptcy lawyer, thus creating this false impression. They often ask you to fill out a form to get a free price quote from a bankruptcy lawyer. These are not real bankruptcy web sites and we recommend that you avoid them since they are just an advertizing middleman.
Full-service Bankruptcy Web Sites
Full-service bankruptcy web sites are the closest thing to a real bankruptcy lawyer. These web sites are operated by trained bankruptcy experts who have prepared many thousands of bankruptcies for the public directly, as well as on a contract basis behind the scenes for bankruptcy lawyers. In this category we recommend American Bankruptcy Company and Managed Bankruptcy as our top picks. These two companies offer comparable services that include just about everything. Close behind them is All Bankruptcy Chapters which is a highly rated full-service bankruptcy company. The only thing it seems to lack that the other two companies provide is an insider knowledge-base. You can read more
about full-service bankruptcy web sites at
Chapter 7 Reviews
Some full-service bankruptcy web sites are operated by lawyers who do not want to use their law license to create an attorney-client relationship with their customers. They want to tap into a nationwide bankruptcy preparation market without being limited to the state in which they have a law license. In order to do this, they have to conceal the fact that they are lawyers since their law license is good only in their home state. They can practice law only in their home state but when it comes to other states, their status is that of a non-lawyer.
For example a bankruptcy lawyer licensed in California may have an office in Los Angeles where she handles bankruptcies, divorce and automobile accidents for her clients face to face, but in order to prepare bankruptcies in Florida where her license is not recognized, she can operate a full-service bankruptcy web site. To avoid problems outside her home states, he has to post a disclaimer on her full-service bankruptcy web site that says the web site is not owned or operated by a licensed lawyer. This way she can charge her Los Angeles clients $2,000 for a bankruptcy under her California license, but charge debtors in Florida and other state only $300 for the same bankruptcy preparation without lawyer representation.
We recommend that chapter 7 and chapter 13 bankruptcy filers who cannot afford to hire an attorney hire a full-service preparation company. They will get the same quality bankruptcy results as most lawyers for as little as $300. Any full-service bankruptcy company will produce a good bankruptcy but only two or three of them can exceed the quality of the documents produced by bankruptcy lawyers. They also provide their customers an insider knowledgebase that can help them recover from the negative credit effects of bankruptcy quickly. In the abundance of caution, we recommend that debtors use a full-service bankruptcy company that can provide access to lawyers who will answer their legal questions for free.
Online Bankruptcy Software Sites
Online bankruptcy software is an alternative to both bankruptcy lawyers and full-service bankruptcy web sites. This type of bankruptcy software resides on the servers of the bankruptcy company and is used by the debtor from a web browser. In this model, the debtor enters their information in a web form much like filling out a registration form. When all the required bankruptcy information has been entered, the user presses a button and the software creates the forms for immediate download.
There only two web sites offering this type of software and they are Pro Bankruptcy Software and American Bankruptcy Company. American Bankruptcy Company offers it as one of three products for those who do not want their full-service bankruptcy product.
We generally do not recommend that a debtor uses any kind of bankruptcy software given what is at stake. Bankruptcy software is only a tool and like all tools, it requires someone to operate it. It is best to have a bankruptcy prepared full-service because this way, a real trained bankruptcy expert takes responsibility for preparing the documents and making sure it is done right. With bankruptcy software, you get out what you put in. If you enter wrong or incorrect information into the software, you will get wrong documents. Bankruptcy software is suitable for those who have a legal background; those who are very familiar with bankruptcy law or those who have filed bankruptcy before.
While we do not recommend bankruptcy software, if you have to use software, then Pro Bankruptcy Software is our recommended choice.
Fake Bankruptcy Software Sites
For lack of a better name, we call this type of software, fake bankruptcy software. The web sites in this category do not sell real bankruptcy software but rather, the blank bankruptcy forms. They are better described as bankruptcy kits but the difference is that they falsely claim to be actual software. These web sites take the same blank forms that anyone can download from the court web sites and market them to gullible buyers as software. If you can download the blank bankruptcy forms from the court web sites then you do not need to pay for it.
It is not easy to tell these fake bankruptcy software apart from the real ones except for a few subtle indicators. They all sell for a little under $50. So if you see a web site supposedly selling bankruptcy software for say $49, they are selling the blank bankruptcy forms repackaged as bankruptcy software. Stay away from them. Play it safe and use a full-service bankruptcy company.
You will not find a web site that will say they are selling bankruptcy kits and that is because enough people have read our reviews and know to avoid them. Bankruptcy kits are marketed as bankruptcy software but underneath the wrapper, they are simply a collection of blank bankruptcy forms bundled with a how-to manual.
The bottom-line is that a bankruptcy kit is nothing more than the blank bankruptcy forms that anyone can download for free from the court web sites. You can tell these kits because they are all sold for under $50. Play it safe and use a full-service bankruptcy company or an attorney, but if you insist on using bankruptcy software then use Pro Bankruptcy Software.
We hope that we have been able to simplify your bankruptcy web site selection process. If you want a good quality bankruptcy filing but do not want to the high cost of a bankruptcy lawyer then use a full-service bankruptcy company. We have done the research so that you do not have to do it yourself.