Filing Bankruptcy Cost
Filing bankruptcy is not something that should be done lightly. It is not a “do it on your own” type of plan it can cost. Bankruptcy filing should only be done if you have tried to settle your debt in other ways and have been unsuccessful. Bankruptcy should only be pursued when all other options have been exhausted and you simply cannot avoid paying your debt. To help you navigate the bankruptcy process, here is a look at some common bankruptcy costs: The upfront filing fees are one of the biggest reasons that people file bankruptcy. Typically, a person who has just filed bankruptcy will need to pay more than five hundred dollars in filing fees. The new bankruptcy rules that were recently passed increase this amount by another hundred dollars. One way to avoid the filing fees altogether is to have your debts settled through a fresh start agency. Under the new federal law, you can have up to six months to settle your debts before the official filing date. Another aspect that will drive the costs of filing bankruptcy up is the surplus income. This surplus income is the extra money that comes from various sources such as overtime pay, tips, rent, and various business expenses. When filing, you should include a statement from your employer verifying the extra money that you earn and add it to your filing. If you do not include this information, your filing will result in an understatement of your income and may result in your bankruptcy being denied. In addition, filing taxes in the future could also push your filing costs up.
Biggest Reasons For High Bankruptcy High Filing Cost
The second biggest reason for high filing costs is that people often do not request the free consultation with the trustee until they are so far in arrears that their interest is being threatened. Most creditors will allow a free consultation for debtors with less than ten thousand dollars of unsecured debt. Even if you do not qualify for this free consultation, your bankruptcy attorney can draw up a financial plan that will show how much time you have left to repay your arrears and how much money you have left to use. If you cannot negotiate with your trustee for a better fee structure, your only other option is to file voluntarily, which will push the total cost of filing bankruptcy up several notches. Your only way to save some money on the filing cost is by requesting a free consultation from the trustee and having your lawyer draw up the plan on your behalf.
The third reason for filing bankruptcy is because most people who file do not really understand all the implications of the bankruptcy code and how it applies to their particular situation. Only an experienced attorney can help you here and ensure that you do not fall into any of the many loopholes that are found in the bankruptcy code. Only an experienced attorney can also explain to you the impact of changing your lifestyle, such as cutting down on your travel or changing your work style. This means that you would have to pay back the full amount of debts over a period of time, with interest and penalties, as well as pay back the cost of enrolling yourself in a chapter 13 bankruptcy case. The fourth reason for filing bankruptcy is that you might be eligible for a chapter 7 bankruptcy, which provides tax breaks. The biggest advantage of filing for a chapter 7 bankruptcy is that you will not have to pay back the full amount of your debts, unless you have more than a million dollars of household size. On the other hand, filing a chapter 13 bankruptcy is not without disadvantages, as you would be required to give a detailed description of your income and assets to your trustee. You cannot expect your household size to make any difference here, since the trustees will consider your assets based on the current state of your financial problems.