The Costs of Filing Bankruptcy
There are many costs associated with filing bankruptcy. Some of these include filing fees, attorney fees, and trustee fees. While you may be considering bankruptcy as a way out of debt, it is important you weigh all the risks including understanding the fees you will be responsible for. Let’s check out some of these fees.
Some Costs Are More Apparent Than Others
Of all the various fees that come along with a bankruptcy filing, some of them are unavoidable. There is a standard filing fee in the $300-$350 range depending on which type of bankruptcy you are filing. And if the court assigns a trustee, they are entitled to charge a fee for their services as well. But the fees don’t always stop there.
The Attorney Fees Rack Up Quickly
While it is “technically” possible to file for bankruptcy without hiring an attorney, the fact of the matter is — you should not try to do this on your own. Bankruptcy laws are complicated and can be confusing. It is all too common for people to lose property or even income unnecessarily by choosing not to work with an attorney.
Even so, they don’t come cheap, and hiring an attorney will be the most expensive part of your bankruptcy filing. The actual cost will vary based on the complexity of your case as well as the market in which you reside but can range anywhere from $500 at the very least up to $3,500 for Chapter 7, and anywhere from $2,500 up to $6,000 for Chapter 13 – these costs are merely estimates and not intended to be accurate representations of what you should expect to pay an attorney.
The Unforeseen Costs Can Be Brutal
Then there are the less obvious costs, such as loss of income or future income opportunities. If you work in the private sector, you can be denied employment based on a bankruptcy filing. While this may seem unfair, it is becoming more and more common in today’s labor market. A bankruptcy filing can signal a lack of responsibility to a potential employer, and this is almost sure to be the case if your work is related to finances, such as bookkeeping or payroll work.
A bankruptcy filing can remain on your credit report for as long as 10 years, and while your life situation may have changed greatly during that time, you could still find yourself hampered by a decade old bankruptcy.
How Can I Avoid Bankruptcy Fees
The easiest way to avoid bankruptcy fees is to find an alternative to filing bankruptcy. In other words, avoid filing bankruptcy altogether. If you are struggling with mounting debt and feel as though bankruptcy is your only option, you are not alone. Many Americans are leaving with the growing pressures of debt and the lifestyle impacts debt can have. And while bankruptcy is one option for getting out from under so much debt, there are other options available to you.
At CreditGUARD we will work with you to help find a plan that may help you get ahold of your finances without filing bankruptcy. Our certified credit counselors are here to help and are trained to find the best solution for your personal situation. Give us a call today to see if you qualify for our programs!
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Is Debt Settlement a Good Idea? Debt settlement and debt consolidation are not the same. Learn more about the process (and consequences) of settling your debts before going down that path.