Notes About Business

If your financial circumstances are bad enough, you may be considering bankruptcy as a way to solve your overwhelming credit card debt. However, many people are concerned about having to pay for the bankruptcy process itself. If you already have problems paying your current obligations, where are you going to find the funds to cover the cost of bankruptcy?

When you consider what you’re getting in exchange for bankruptcy, the fees are not so great. At the time of this writing, chapter seven bankruptcy costs $274, and chapter 13 costs $189. Of course, these are only the fees that you have to pay to the court, and this does not include your legal fees.

If you’re successful in filing chapter seven bankruptcy, then you’ll be able to wipe out most of your debts. Chapter 13 on the other hand, would provide you with a long-term repayment plan instead of simply doing away with your bills.

Either way, declaring personal bankruptcy can be a lifeline for those in serious financial difficulties. Obviously it would be nice to completely wipe out your debts, but sometimes even a simple agreement with your creditors is good enough to get you back on track. This can be the case when you’re trying to catch up on your mortgage payments and don’t wish to go into foreclosure.

You will need a lawyer to get you through the process, and these costs are separate from the bankruptcy fees. However, you don’t want to try and go it alone because the bankruptcy code is too complex, especially with the recent changes.

You actually get some relief as soon as you file your bankruptcy request, because something called the automatic stay goes into effect immediately. This means that your bill collectors cannot contact you until your case has been settled once and for all.

In fact, as soon as you file your request with the court, you receive an automatic stay which means that no creditor can demand payment from you until your case is resolved. So right away you have freed up some funds which can be redirected to cover legal fees.

You should really avoid trying to declare bankruptcy without the help of a lawyer, since this is a serious financial decision with long-term consequences.