If you are facing a level of personal debt that has you considering bankruptcy, the prospect of spending any more money might be an immobilizing thought. Thinking that way will only keep you in a perpetual cycle of debt that you cannot escape. Filing for bankruptcy will cost you money, but think of this money as an investment in your future financial freedom.
Before you commit to working with a bankruptcy lawyer, discuss the costs associated with the process with him or her. Be sure to discuss his or her fees as well and receive a quote for all services before you sign any work agreements.
You must pay a filing fee to begin the bankruptcy process. For a Chapter 7 case, the fee is $335. For a Chapter 13 case, the fee is $310. Bankruptcy trustees may also charge filing fees, which are generally between $15 and $20.
You are not required to work with a lawyer to complete the bankruptcy process. Completing it alone, or “pro se,” can save you money by cutting out the attorney fees. But working with an attorney can actually save you money because your attorney can help you negotiate the terms of your repayment plan and guide you through the process to ensure that you stay current with your payments. Perhaps more importantly, bankruptcy cases represented by lawyers are significantly more likely to be successful than pro se cases.
Generally, attorney fees for a Chapter 13 case are higher than those for a Chapter 7 case. Attorney fees can vary widely according to your area of the country, the specific details of your case, and your attorney’s experience level, but for the most part, attorney fees in Chapter 7 cases are between $500 and $3,500 and $1,500 to $6,000 for Chapter 13 cases.
The Cost of Repaying Your Debt
There are other costs you will face with your bankruptcy claim, as well. One of these is the need for credit counseling. Another is a mandatory financial literacy course. If you file for Chapter 7 bankruptcy, the loss of your nonexempt assets can also have a significant cost, both financial and emotional. Aside from these expenses, there is also the cost of making your debt payments, whether they are part of a repayment plan or a liquidation plan. Altering your lifestyle to repay your debt and avoid new debt can mean making significant sacrifices to what you are used to in terms of housing, entertainment, transportation, and dining.
Work with an Experienced Itasca Bankruptcy Attorney
If you are considering filing for bankruptcy, talk to an experienced bankruptcy attorney first to determine the right strategy for your case. Your lawyer can discuss different chapters of bankruptcy, your responsibilities and projected outcomes with each, and the overall cost of the process with you. He or she can also go over bankruptcy alternatives with you in the event that bankruptcy is not ideal for your case. To get this conversation started, contact our team at Newland & Newland, LLP today to set up your free legal consultation in our office. We serve clients in the Arlington Heights, Palatine, Rolling Meadows, Libertyville, Mundelein, Buffalo Grove, Schaumburg, Elk Grove, and Itasca areas.
(image courtesy of Vitaly)