The cost of filing for bankruptcy

Living in the modern world is not easy. Value for money is a concept rarely heard of. With additional financial pressures as a result of recession and layoffs, debts constantly mount. In such a scenario applying for bankruptcy can be looked as a solution till you get back on track. Many people tend to dither between wanting to file for bankruptcy and being too scared to do so. Others who do decide to take the plunge often back off at the thought of bankruptcy fees involved.

What you have to understand is that if you are in a situation where paying off debts doesn’t seem likely for a while and they are going to keep mounting, then declaring bankruptcy is an option that you have to think of. Many people tend to hesitate taking the plunge thinking the costs involved are formidable. This line of thinking rises purely from being unaware. The costs actually work out much simpler than perceived.

Court fees form a small portion of the bankruptcy proceeding. If you are filing under Chapter 7, the court fees payable is around $274. In the case of Chapter 13, it is $189. For those people who are significantly in debt, this may seem like a huge amount. But what you should look at here is the long terms benefits. At this price, you will be able to get a respite for paying your dues. It will give you time to take a step back, re-plan your finances and work out a plausible means of getting out the financial rut you are in.

This having been said, bankruptcy costs are largely due to legal fees that are incurred. Declaring bankruptcy requires that you hire the legal services of an experienced firm or lawyer. Under any circumstance, filing for bankruptcy is a complicated affair and not one you should attempt on your own. Law firms understand this and therefore charge a substantial amount in terms of fees. Through it all you have to keep in mind that successful bankruptcy claims can give you a much needed break from paying off debts. It will also mean that you could be eligible for a discharge. In fact most law firms work out payment schedule for their fees since they know they are working with clients who are already in serious financial trouble.