For the majority of Americans who are struggling financially, bankruptcy can offer a significant relief to their debt burden. Bankruptcy is a very personal decision and it is important to consider all aspects including what is the cost of filing bankruptcy.
Even debtors that choose not to hire an attorney and complete the paperwork on their own, will still be responsible for paying court fees, filing fees and potentially other charges depending on the chapter of bankruptcy they file. If you decide to hire legal representation, you will need to pay the attorney fees as well. This is one of the reasons why many individuals consider the cost of bankruptcy an investment. There is a lot at stake and it is important that debtors consider the implications of filing for bankruptcy.
So, what is the cost of filing bankruptcy? How much debt can you alleviate or eliminate? Consulting with an attorney can help you get the answers you need to these questions.
The Types of Bankruptcy
You may already be aware that there are two different types of bankruptcy that an individual can file for. These two types are Chapter 7 and Chapter 13.
Chapter 7 bankruptcy allows debtors to eliminate all of their unsecured debts such as credit cards, personal loans and medical bills. These debts are wiped away. This chapter of bankruptcy is geared towards individuals that simply do not have enough income to pay their debts. The entire process can be over in as little as four months.
Chapter 13 bankruptcy provides debtors the opportunity to pay off payments that are past due to creditors. These creditors can be mortgage and vehicle financing lenders. The goal is to have the debts paid off in 3 to 5 years.
The Cost of Bankruptcy
You will need to find out the cost to file the chapter of bankruptcy you that qualifies for your situation. Lawyer fees will need to be paid to the bankruptcy attorney you hire. It is not advised that individuals try to file for bankruptcy on their own because of the complex bankruptcy law.
Those who file for bankruptcy will also be responsible for paying for debt counseling during the bankruptcy process. Debtors must complete credit counseling before they file their bankruptcy case, and also pay for an education course after their bankruptcy has been discharged.
The final cost of filing bankruptcy that you file will depend on several factors. Schedule a consultation with a bankruptcy attorney to learn more about your bankruptcy options.
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