Thursday, December 15, 2011

5 Common Misconceptions about Bankruptcy: #4 Filing is Free

Unlike other legal issues, unmanageable financial debt is a problem that many are too ashamed to discuss with their friends and family. This means that many people piece together their knowledge about bankruptcy from unreliable and confusing sources. The result is that there are a lot of misconceptions about bankruptcy. In the next 5 posts we will write about the most common misconceptions that we hear from clients in our office.

Common Misconception #4: Filing is Free

Many people believe that filing for bankruptcy means you have reached a point where you have no money left.  If you have no money left, then filing for bankruptcy must be free, right?

Actually, most people who file for bankruptcy have some assets and some income.  They simply don't have enough income or assets to keep up with their debt.

And filing for bankruptcy is not free, but it is a bargain.  The filing fee for filing a Chapter 7 Bankruptcy is $306 and for a Chapter 13 Bankruptcy is $281.  In addition, our attorney's fees range from $999 to $3,500 for a consumer bankruptcy, depending on how complicated the case is.  For clients who are concerned about paying a few thousand dollars to file for bankruptcy, we usually point out that this amount is much much smaller than the amount of debt being discharged in exchange.  If someone told you that they would settle your $50,000 credit debt for $2,000 you would probably take them up on it.

For a more specific calculation of what a bankruptcy would cost in your case, visit our Bankruptcy Cost page.

1 comment:

  1. There are people who file for bankruptcy without having an attorney. Yeah, you can do that, but once you present yourself in court, it is very important to have one because you’ll need to do some consultations beforehand. You should see who you feel most comfortable working with and vice versa.


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