Bankruptcy Cost - your questions answered right here...
More About Bankruptcy Cost...
You may have to go a little deeper in debt to file for bankruptcy. The costs involved vary according to factors such as whether you are going to try to do it yourself or hire an attorney. If you chose to do it yourself, there are filing fees you will have to pay.
If you chose to handle bankruptcy filing yourself, you will have, at the very minimum, filing fees. According to the U.S. Courts website, the bankruptcy filing fees (effective in April 2006) are:
Chapter 7 $299
Chapter 11 $1,039
Chapter 12 $239
Chapter 13 $274
The website at www.uscourts.gov/bankruptcycourts.html has the official forms that must be used.
Other aids for handling bankruptcy yourself include DIY Bankruptcy Kit & Forms
that cost around $150 for chapter 7 and about $300 for chapter 13. There are bankruptcy forms kits available that cost somewhere between $50 and $200 depending on the state you live in. You can buy bankruptcy software than ranges between $50 for the cheap ones up to $1,000 or more for programs like those lawyers use.
If you decide to use a bankruptcy attorney, the fee charged will depend on the attorney. There may be some type of legal aid available at no or little charge. If there isn't any free or low cost legal service available to you, check with a few law offices to find the fees and services that fit your needs and situation. There is variation between bankruptcy courts, but attorney costs start somewhere around $500 in addition to the filing fee. Keep in mind that once you have filed for bankruptcy, attorney fees in your case must be approved by the bankruptcy judge.
If you are filing chapter 7 bankruptcy, you probably won't be able to hire an attorney without paying first. If you're deep in debt, how are you going to afford an attorney? You may have to borrow even more if you can. If you can't manage to get the money, you may have to stop making payments on debts that will probably be discharged. You can save that money until you have enough to pay the lawyer. If you are filing chapter 13, you are more likely to be able to pay your attorney in instalments.
In a bankruptcy case, it's not the amount of money you owe that determines the cost, but the complexity of your case. A simple, straight chapter 7 is the least costly. If you are filing chapter 13, the more complex your case, the more it will cost; but the interest charges saved over the three to five year bankruptcy period help offset the expense of attorney fees.
In a chapter 11 business bankruptcy, the lawyers usually charge on an hourly basis. The more complex the case, the more it will cost.
Unfortunately, you can't file bankruptcy for free. You may have to make difficult spending decisions to finance bankruptcy filing. It may be tempting to do without any legal counsel; just do it yourself and save costs. If you absolutely can't manage to hire an
attorney, look into legal aid.
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