The words “cheap” and “bankruptcy” might not seem like they fit together. In many ways, they do not; the bankruptcy process has fixed costs, such as filing fees and the cost of the mandatory financial counseling session prior to filing, which cannot be avoided. But with bankruptcy, you need to think long term. If you do not take action to reduce your personal debt, it will continue to compound, pushing you further and further from being in control of your finances. Although there are ways to keep your bankruptcy costs down, it is much more important to focus on the value of your bankruptcy and its associated costs than it is to focus on specific dollar figures.
Educate Yourself About Bankruptcy Before You File
One of the benefits of working with a bankruptcy lawyer is that he or she can answer your questions and help you understand the concepts and laws you will encounter through your bankruptcy before you file. Before you meet with your lawyer, though, take the time to learn a bit about the bankruptcy process so you can determine helpful questions to ask.
There are two types of bankruptcy available to individuals struggling with personal debt: Chapter 7 and Chapter 13. Chapter 7 bankruptcy cases require the liquidation of nonexempt assets in order to repay the filer’s creditors. Chapter 13 bankruptcy requires the filer to submit a repayment plan to the court. If the plan is approved, the filer works with a bankruptcy trustee to repay the debt over the next few years. Both chapters have specific qualification criteria.
How Much Does It Cost to Complete the Bankruptcy Process?
Here are a few quick numbers and facts about bankruptcy to consider and discuss with your lawyer:
- The filing fee for a Chapter 7 case is $335;
- The filing fee for a Chapter 13 case is $310;
- These fees can be paid in installments;
- If you need to convert your Chapter 13 case to Chapter 7, the conversion fee is $25;
- Various court fees may be applicable to your case;
- It is possible to work with a pro bono attorney or receive free or low-cost legal aid through a legal clinic; and
- You may pay all or part of your attorney fees through your Chapter 13 repayment plan.
Work with an Experienced Phoenix Bankruptcy Attorney
Do not assume that working with a bankruptcy lawyer will make your case unnecessarily more expensive. Yes, lawyers do cost money, but the value of working with a bankruptcy lawyer can far outweigh the money you might have saved by representing yourself. For example, your lawyer can help you negotiate the terms of your bankruptcy case to make it more manageable or avoid losing certain items with sentimental value. If you are considering filing for bankruptcy, the first thing you should do is speak with an experienced bankruptcy lawyer to determine your rights, your options, and the most effective strategy for your case.