Okay, you already know that filing for bankruptcy is a very serious decision and not one you should make without studying up on and considering alternatives for. When doing so, it’s important to remember that there is no quick fix to bankruptcy as there are countless hidden bankruptcy fees, lawyer’s fee structures, court costs and all around annoyances that are associated with this “simple” way of relieving your debt. Here’s an idea of some of the bankruptcy fees you should expect when filing for bankruptcy.
Bankruptcy Fees #1 – Lawyers’ Fee Structures
Attorney Billing Still Applies to Bankruptcy!
The first thing you should consider about bankruptcy is that no one goes into bankruptcy alone. In order to file for bankruptcy, you’re going to need to hire a lawyer, and as we all know, lawyers cost money. Ask yourself: Can I afford to pay a lawyer? What am I hoping to gain by filing? Make sure it’s worth the money you will have to spend on him or her, because depending on how complicated your case is, it could end up costing you a lot of money.
Bankruptcy Fees #2: Court Costs
What Chapter You File Matters!
Depending on what chapter bankruptcy you decide to file, the amount of court costs and other hidden bankruptcy fees will be raised. For example, if you file for chapter 7 bankruptcy you can expect to pay roughly $300 in court fees. Chapter 11, roughly $1,040. For Chapter 12, roughly $240 and for Chapter 13, rought $275 according to the US Courts Web site.
What are the differences? Chapter 7 is complete bankruptcy and when you ask the court to discharge your debts. The basic idea in a chapter 7 bankruptcy is to wipe out your debts in exchange for your giving up your property. Chapter 13 can also be referred to as an adjustment of debt and shows a plan of how you will pay off some of your past due and current debts over the course of three to five years. Chapter 11 is known as a reorganization type of debt and requires a debtor to file a plan to pay debts or parts of debts from current income. Chapter 12 bankruptcy is reserved for family farmers.
Bankruptcy Fees #3: Bad Credit
Bankruptcy is the Highest Price Your Credit Score Will Pay
The main deterrent for most to not file for bankruptcy is that it will negatively impact your credit record more than any other action you choose. It’s one hidden bankruptcy fee you you won’t be able to pay off. Because you can only file once every seven years, this is a considerable amount of time to carry such a huge negative on your credit history. In addition, because your credit history is used to check and verify everything, filing for bankruptcy can make it nearly impossible for you to obtain credit, buy a house, car or get any sort of financing. Also, you can expect your interest rates to be higher than most.
Paid Your Bankruptcy Fees? Sorry, there’s No Such Thing as a Clean Slate!
Think just because you’re filing for bankruptcy, your debts will be discharged? Think again. Not all your debts will be discharged in bankruptcy. What won’t be? Student loans and back taxes within the past three years are prime examples. It’s important to remember that bankruptcy is not a quick fix for anyone and requires a lot of time and effort and ironically enough – some money as well.
As Executive Vice President of Debt Logic, a debt resettlement company, and a former attorney, Joshua Just is well versed in the fees associated with filing for bankruptcy.