Newsflash: bankruptcy ain't free!!
- By Ronny Sikes
- Published 04/12/2010
- Finances
- Unrated
Newsflash: bankruptcy ain't free!!
Ironically, in order to file for bankruptcy - which is legally saying you are broke – you are required to pay some money. It could end up costing a lot of money depending on your situation, but in most cases the money you spend now to file for bankruptcy will be beneficial in the long run, and will greatly improve your quality of life in the present, although there are also non-monetary costs we will go into as well.
There are many costs associated with filing for bankruptcy from attorney’s fees to court paper filing fees. Some of the fees and services are necessary; some aren't. It all depends on how much work you’re willing to do yourself. The more legwork you’re willing to put in, the less it is going to cost you.
But keep in mind that you are also not a professional bankruptcy attorney. Someone who has spent their entire life studying and learning the laws will be far more qualified to handle certain aspects of your case. So while yes, you will pay less to do this all on your own, it is probably not worth it in the long run. The amount of value a lawyer provides far outweighs the savings you get by doing it yourself, not to mention the amount of work that would be involved on your part.
New bankruptcy laws are making it even more costly for consumers – like with the addition of mandatory credit classes for every person filing for bankruptcy. You need to have a pre-bankruptcy counseling session which has an average cost of $50, and then after your bankruptcy goes through, you’re required to take a debtor education course which can be as much as $100. These new laws are meant to help people learn how they got in this situation, how to prevent it from happening again, and learn new ways to control debt manage their money.
The costs will vary from state to state, but you hundreds of dollars to file for bankruptcy, or up to thousands when it’s all said and done. It all depends on your situation and the type of bankruptcy you're filing for. Of course for the amount you’re paying you could be eliminating hundreds of thousands of dollars in debt which will enable you to start building your net worth again. But there are some downsides to bankruptcy besides the fees associated with it.
Businesses and financial institutions look down on bankruptcy and usually don’t want anything to do with you. If they will take your business, you can expect to pay very high interest rates and fees because you will be considered high risk. Anyone will be able to look up your credit report and see that you have a bankruptcy. It will be visible for about seven years. In these seven years you will have a hard time getting any decent credit cards, mortgages or car loans.
As you can see there are a lot of factors involved when filing for bankruptcy. It’s probably best to contact a local attorney so they can help you proceed, but the bottom line is this; you cannot file for bankruptcy for free. There are always going to fees associated with it.
There are many costs associated with filing for bankruptcy from attorney’s fees to court paper filing fees. Some of the fees and services are necessary; some aren't. It all depends on how much work you’re willing to do yourself. The more legwork you’re willing to put in, the less it is going to cost you.
But keep in mind that you are also not a professional bankruptcy attorney. Someone who has spent their entire life studying and learning the laws will be far more qualified to handle certain aspects of your case. So while yes, you will pay less to do this all on your own, it is probably not worth it in the long run. The amount of value a lawyer provides far outweighs the savings you get by doing it yourself, not to mention the amount of work that would be involved on your part.
New bankruptcy laws are making it even more costly for consumers – like with the addition of mandatory credit classes for every person filing for bankruptcy. You need to have a pre-bankruptcy counseling session which has an average cost of $50, and then after your bankruptcy goes through, you’re required to take a debtor education course which can be as much as $100. These new laws are meant to help people learn how they got in this situation, how to prevent it from happening again, and learn new ways to control debt manage their money.
The costs will vary from state to state, but you hundreds of dollars to file for bankruptcy, or up to thousands when it’s all said and done. It all depends on your situation and the type of bankruptcy you're filing for. Of course for the amount you’re paying you could be eliminating hundreds of thousands of dollars in debt which will enable you to start building your net worth again. But there are some downsides to bankruptcy besides the fees associated with it.
Businesses and financial institutions look down on bankruptcy and usually don’t want anything to do with you. If they will take your business, you can expect to pay very high interest rates and fees because you will be considered high risk. Anyone will be able to look up your credit report and see that you have a bankruptcy. It will be visible for about seven years. In these seven years you will have a hard time getting any decent credit cards, mortgages or car loans.
As you can see there are a lot of factors involved when filing for bankruptcy. It’s probably best to contact a local attorney so they can help you proceed, but the bottom line is this; you cannot file for bankruptcy for free. There are always going to fees associated with it.
Ronny Sikes
Ronny Sikes is a long-time copywriter for Ratelines.com. For 6 years, Ratelines has been an objective and reliable source of financial information. For factual advice on top cd rates or low-low mortgage rates, please visit our site.
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