One of the biggest ironies in life is that if you want to file for bankruptcy, it is not free. You do have to pay for it, and it is not necessarily cheap. Bankruptcy can cost anywhere from a few hundred to a few thousand dollars.
This can be a daunting situation when you are already struggling financially. You will face three main bankruptcy expenses: court filing fees, credit counseling fees, and attorney fees for your lawyer. Filing fees are pretty much the same across the country, but attorney fees can vary by location and the complexity of your case. A simple case in a rural area would cost less than a complex one in an urban area.
Those filing for bankruptcy are required to complete both a credit counseling course and a debtor education course as part of the bankruptcy process. Fortunately, these cases do not cost too much and can be done for under $100.
The bulk of your expenses will go toward your lawyer, as they do most of the legwork. They file your petition and represent you in court. They also ensure you meet all deadlines and avoid costly mistakes. While you can file for bankruptcy without a lawyer, having one on your side is well worth the cost.
Keep in mind that there are two main options for consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 is cheaper, costing on average between $1,858 and $2,938. Chapter 13 bankruptcy is a bit more expensive, costing between $2,833 and $5,413, on average.
Paying for Bankruptcy
If you file for Chapter 13, you can structure a repayment plan for your attorney fees after you have filed. But if you file Chapter 7, you will likely need to pay your attorney before they file your case.
Here are a couple of ways to go about it:
- Raise the money. This will not be easy. First, you will need to minimize your outgoing cash. Stop payingcredit cards and put the money toward your bankruptcy. Unsecured debts, like credit cards will be wiped out by Chapter 7 bankruptcy. You can also try to earn some additional income by getting a part-time job or selling stuff you no longer need. Another option is to borrow from a friend or relative and pay it back with the credit card payments you will not have to make after you file.
- Work out a payment plan. You might be able to spread out the costs of your attorney and filing fees. Some lawyers will accept payments over time. However, most lawyers handling Chapter 7 bankruptcy will want payments completed before filing your case because you will not be legally obligated to pay your attorney after filing.
- Go pro bono. You might qualify for waived fees or even free legal services if your income is less than 150% of the poverty level for your family size and you are unable to afford a payment plan. Your local bankruptcy court can help connect you with pro bono bankruptcy attorneys. You can also reach out to your state or local bar association, which may have a referral service.
Bankruptcy can be a lifesaver for your finances but do keep in mind that it costs money to get rid of your debt.
Need Guidance? Contact a Bankruptcy Attorney
Navigating financial hardship is never easy—but you don’t have to go through it alone. If you’re considering bankruptcy or looking for a fresh financial start, Attorney Adam Freiman is here to help. With decades of experience serving individuals and families across Baltimore, Adam provides clear, compassionate guidance tailored to your unique situation.
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